Livestock trade and marketing costs in the Burkina - Faso - Ghana corridor -- final report

It describes current marketing channels, estimates marketing costs for the import and movement of Sahelian livestock from the border to terminal coastal markets, identifies barriers to more efficient trade, and recommends policy and infrastructural demands. In addition, it assesses the likely impacts of the proposed reforms on individual stakeholder groups. The report finds that the environment for livestock marketing in Ghana is poor. The system is subject to both demand and supply constraints. Per capita consumption of red meat is low and falling. On the supply side, unsound economic policies and regulations, namely, high customs duties (25%) and import sales taxes (15%), limit the importation of livestock, even though Ghana is far from self-sufficient in meat production. These high costs make it unprofitable for traders to import livestock legally. Thus, smuggling is prevalent. Knowing this, the police, customs officers, and other uniformed authorities have established an elaborate system of checkpoints at which they extract bribes from traders hauling animals to market. These roadblocks increase both transportation time and the risk of losses due to mortality. Traders pass on the increased marketing costs to consumers and make meat prices higher than they would otherwise be. The situation is exacerbated by the decline in consumers" purchasing power over the last two decades and by exchange rate problems. The combined effect of a still overvalued CFA franc, and the relative decline of the cedi vis-a-vis the CFA makes importing of Burkinabe animals problematic. The depreciating cedi is offsetting the initial advantages of the CFA devaluation in 1994, and the general instability of the cedi vis-a-vis hard currencies complicates the import of essential inputs to the livestock marketing chain. Short-term recommendations are to eliminate customs duties and import sales taxes on imported livestock from the Sahel; reduce drastically the number of checkpoints and launch an anti-corruption campaign that combines negative sanctions with restructured positive incentives; and establish a veterinary protocol with Burkina Faso, Mali, and Niger. Also includes recommendations for medium- and long-term action. (Author abstract, modified)