Trade Negotiations Insights • Volume 9 • Number 5 • June 2010
The West Africa EPA Development Programme: Between conservatism and innovation
by ECDPM
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Despite several self-imposed deadlines, West Africa and the EU continue to negotiate an Economic Partnership Agreement (EPA), as many other ACP regions. Beyond market access, EPAs represent an opportunity to strengthen regional integration and put ‘trade at the service of development’. EPA provisions must thus be tailored to address the development objectives of the region. In parallel, accompanying measures and development assistance to build capacity, implement the EPA and support domestic reforms must be provided.
It is in this context that the West Africa EPA Development Programme (EPADP/PAPED) originated. In light of the recent adoption of the EU’s commitment to this programme - articulated in the Council Conclusions of 10 May 2010 - and in the context of the Spanish EU Presidency Seminar on “Strengthening Regional Integration in West Africa” on 11-12 May in Brussels, TNI has asked policy makers from both sides to share their insights and positions on what holds the potential to be a landmark initiative.
The EPADP/PAPED: A West African initiative
The PAPED is first and foremost a West-African initiative, which has been elaborated by and for the region through a broad participatory approach led by the ECOWAS and UEMOA Commissions at both the regional and national levels. In terms of structure, the PAPED justifies the need for EPA accompanying measures, related to regional integration, on two grounds: to reap the benefits and to mitigate the negative impacts of the EPA. The PAPED consists of 5 ‘axes’ for which EPA development support is needed, which are broken down further into different ‘components’ describing areas for programmatic support. Specific projects are elaborated at the national level through the definition of ‘National Operating Plans’ and an overall financing cost for each component for the initial five-year time frame has been provided within the PAPED itself.
A breakdown of these costs by PAPED axis is shown in Figure 1.
Using these indications, the total estimated cost of the PAPED as presented in the overall regional framework is €9.54bn over an initial period of five years. Two thirds of this amount is currently earmarked for trade-related infrastructure, such as rehabilitation of energy, road and telecommunications networks[1].
Source: PAPED.
One issue of current concern, however, is that the National Operating Plans of the PAPED, as currently outlined, appear to demonstrate significant discrepancies with the regional framework in terms of identified needs, and in some cases forecast highly ambitious levels of funding that might be available under the programme. While the list of activities identified in the PAPED should be allowed to evolve over time to reflect emerging needs, it will naturally be important to ensure coherence between the regional PAPED and underlying national plans. This should be a priority for West Africa, if the PAPED is to serve as a credible operational instrument for the strategic planning of support to West Africa.
Furthermore, it should be stressed here that many elements of the PAPED embody goals with much broader relevance than the strict context of EPAs. The PAPED sets out a common regional vision - shared by the two regional organisations ECOWAS and UEMOA - of economic integration both within West Africa and with the wider world. As such, the PAPED may serve as a useful technical tool and an invitation for all donors, EU and non-EU, to engage in a more effective and coherent approach to addressing the trade-related needs of the region in general.
The EU response to the PAPED: conservative estimates
In this respect, and in line with the Aid for Trade Strategy it adopted in 2007, the EU has recently agreed to “increase its total aid for trade in coherence with the gradual increase in overall development aid towards the established 2015 target and in response to needs prioritized by partner countries[2]“.
This commitment will be implemented through a range of existing channels at the EU level and through the bilateral programmes of the EU Member States, as well as through the contributions to the region via multilateral agencies, such as the World Bank, the African Development Bank (AfDB) and United Nations (UN) bodies.
On the 10th of May, the EU ministers of development outlined their expected support to the EPADP/PAPED. Besides reiterating commitments on aid for trade and aid effectiveness, the EU estimates that (i) “funds available for PAPED-related activities from all of its financing instruments over the next five years amount to at least 6.5bn Euros”, while (ii) “total aid for trade to West Africa from all donors can be projected to exceed 12bn US dollars in the same period[3]“.
Although the latter amount would appear sufficient to fully cover the estimated costs of the PAPED over the period from 2010-2014, the EU’s approach remains conservative. Indeed, a recent study conducted by the European Centre for Development Policy Management (ECDPM), modelling different scenarios using historical data, suggests that these US$12bn (€9.7bn) correspond to the amount of AfT that could have been predicted based on the past 3-year average (2006-2008) of the overall AfT to West Africa[4]. In fact, our analysis, based on the most recent AfT figures available (2008), indicates that as much as €14bn (US$17.4bn) of AfT from the donors community to the region is a more realistic figure.
Moreover, information collected by ECDPM - and by the European Commission via its delegations in West Africa and in consultation with EU Member States - suggests that the €6.5bn committed by the EU corresponds to support already identified as forthcoming for PAPED-related activities.
It is important to note that these figures, notably for EU member states and in particular other partners, are underestimated. Indeed, given that the standard horizon of donor programming is less than the 5-year period of the initial phase of the PAPED, the €6.5bn figure is likely to increase further as funding cycles progress and as donors respond to specific requests from West African countries[5]. In this respect, much will depend on the requests coming from partner countries and the elaboration of the PAPED in terms of national-level operational plans, hence the importance, beyond the mobilisation of resources, to pay attention to the concrete implementation of the initiative.
In short, while the EU highlights the availability of resources to support the PAPED, the Council Conclusion fall short of meaningful new funding commitments. The potential of the EU response to the PAPED therefore lies in its operationalisation.
Beyond the commitment of resources: Operationalising the PAPED
The challenge ahead involves putting the Programme into operation, through the work of the West African countries, regional organisations, and donors, in order to exploit its potential added value as a strategic framework for AfT to West Africa.
To do so requires coherence between the PAPED and other regional and national strategic frameworks. As a tool designed, inter alia, to enhance the economic integration of the region, the PAPED sits alongside other important regional integration frameworks in West Africa, most notably the Regional Economic Programme of the UEMOA, the Community Development Programme of ECOWAS, Peace and Security initiatives and key sector policies (such as in energy and the ECOWAP in agriculture), as well as national development strategies. Effective mechanisms to ensure continuing coherence and coordinate the frameworks’ implementation will be key to their success.
Moreover, it will be critical to ensure against the emergence of ‘aid for trade orphans’ (countries whose AfT needs are neglected), and that AfT levels remain consistent over time. OECD figures show that per capita rates of AfT vary widely between West African countries (with for example Mali, Benin and Ghana receiving 3 to 4 times as much as Togo, Cote d’Ivoire and Niger)[6]. The same figures also reveal how levels of AfT have fluctuated significantly on an annual basis. Given the size and geographical scope of its various operations, EU donors can help prevent this by encouraging that all countries benefit from AfT on a sustained basis, particularly through rigorous application of the EU Code of Complementarity and Division of Labour[7].
Figure 2: EU ‘Darlings’ and Orphans in West Africa, 2008 (€ per capita).
In the same vein, enough flexibility should be injected in the operationalisation process of the PAPED so as to ensure a rebalancing of priorities and allocation of funds between axes according to the demand. Data collected by ECDPM in the context of the above-mentioned study suggest a mismatch between resources currently identified and the estimated requirements given in the PAPED. A significant proportion of forthcoming donor-related PAPED activities (€3.63bn) are concentrated on PAPED Axis 1, while the PAPED itself only indicates a need for about half this amount (Fig 1). By contrast, all other axes appear underfunded, with the single most important axis - Axis 3 covering infrastructure - currently facing a significant shortfall (only €3.74bn provided)
A “precious” first stone
Provided that these concerns are taken into consideration, the PAPED could well be successful in achieving its goals, all the more since it provides the basis for a long-term engagement process, as well as an improved way of coordinating internally and together with other donors, including joint programming and co-financing initiatives. This implies, however, that West Africa ensures a coherent and effective implementation framework for the PAPED and that the EU coordinates its support for it effectively, in line with its commitment to apply the Paris Declaration on Aid Effectiveness, the Accra agendas and the Council Conclusions of 11 November 2008 on Regional Aft Packages. As a regionally-owned strategic framework, the PAPED could be instrumental in facilitating the implementation of such principles. In this respect, the recent EU decision to set up “an efficient operational framework [...] to allow monitoring and evaluation of the implementation of PAPED components, based on existing development budget frameworks and aid mechanisms in West Africa and in keeping with international commitments on aid effectiveness” is a welcome development.
Ultimately, the merit of the PAPED and the EU support to it will depend on the political will and capacity of both West Africa and the EU to effectively translate principles and good intentions into coherent and coordinated actions. As a result, the only conclusion one can reach at this stage is that, although many of its “angles still need to be polished”, the PAPED, conceived as a dynamic framework, definitely represents a “precious first stone”.
[1] These are only first estimates and amounts need to be reassessed based on concrete project designs that are strategically well identified, primarily through the National Operating Plans.
[2] Council of the European Union, Council Conclusions: EPA Development Programme (PAPED), 10 May 2010.
[3] Ibid.
[4] ECDPM. 2010. The EU Commitment to Deliver Aid for Trade in West Africa and Support the EPA Development Programme (PAPED). (ECDPM Discussion Paper 96). Maastricht: ECDPM
[5] Indeed, almost half of PAPED-related projects identified in the data (341 out of 749) are due to be completed by 2011, suggesting that many donors have yet to fully elaborate their plans for the period from 2012-14
[6] This picture is by definition incomplete, as programming of PAPED support is an ongoing exercise; disparities among countries may reflect different programming cycles, priorities among donors (e.g. EU vs. non-EU), absorption capacity by recipient countries or quality of reporting
6 [7] Council of the European Union. (2007). Council Conclusions on the EU Code of Conduct on Complementarity and the Division of Labour. General Affairs and External Relations Council Meeting of 15 May 2007. Brussels: Council of the European Union.
[i] San Bilal, Melissa Dalleau, Dan Lui and Jeske van Seters; contact: sb@ecdpm.org
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