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Africa

West Africa Trade Will Take a Hit As Mali, Niger and Burkina Faso Leave Ecowas

todayFebruary 15, 2024 3

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The membership of the Economic Community of West African States (Ecowas) has been whittled down from 15 to 12 following the unilateral withdrawal of Niger, Mali and Burkina Faso in February.

Founded in 1975, Ecowas is one of eight regional economic communities recognised by the African Union to foster regional integration on the continent. Its main objective is to create a single, large trading bloc through economic cooperation.

Since 1975, Ecowas and its sister organisation the West African Economic and Monetary Union (known by its French acronym, Uemoa) have implemented numerous policies aimed at improving how west African countries trade with each other and how they are connected to the world.

Yet, progress towards regional integration has been slow. Intra-regional trade remains well below the levels of other regions and the west African economies still rely a lot on informal activities. The limited results achieved in regional integration mean that there is a mismatch between regionalism as it should be on paper and as it is experienced on a daily basis. Despite the many agreements signed between west African countries to foster integration, west Africa is one of the world’s most expensive regions in which to do business.

Political elites bear a great part of the blame for this. In a political system that relies on interpersonal relations, regional integration goes against the informal arrangements that politicians have established with wealthy traders. These networks have encouraged the development of informal trade between west African countries and prevented the implementation of trade facilitation initiatives. Much of the trade between Benin, Niger and Nigeria, for example, relies on informal networks that connect traders in border regions to state elites in the capital cities.

Why three landlocked countries, among the poorest in the world, would leave an organisation established to foster free movement of people, goods and capital across the region is a puzzling question, considering the potential consequences.

Read more: Ecowas: why withdrawal of Mali, Niger and Burkina Faso signals fresh trouble for the Sahel

While the decision appears to have been made for political reasons, the economic consequences will be far-reaching. In the past, border closures between Sahelian and coastal countries have had devastating consequences on the regional economy. They have also affected the livelihoods of millions of farmers, herders and city dwellers who depend on regional trade perhaps more than anywhere in the world.

It was precisely to foster these complementary relationships between the Sahel and the Gulf of Guinea that Ecowas was established in Abuja nearly 50 years ago.

The integration conundrum

The Sahel is a large semi-arid region that stretches from Senegal in the west to Chad in the east. Subject to constant climatic uncertainties, it includes some of the poorest and least developed countries in the world.

Sahelian countries such as Burkina Faso, Mali and Niger depend more on regional trade than coastal countries, such as Côte d’Ivoire, Ghana or Nigeria. This is because they are far less urbanised and industrialised than their neighbours. They tend to produce identical agricultural commodities, which they typically trade with other countries located on the Gulf of Guinea.

Livestock trade between the Sahel and the Gulf of Guinea is also highly dependent on free movement between west African countries. Close to two thirds of the livestock movements recorded in west Africa cross an international border. This is usually from the Sahel to big southern markets such as Abidjan in Côte d’Ivoire.

A purely Sahelian bloc, like the recently created Alliance des États du Sahel (AES), would never be able to replace Ecowas. This is simply because of the regional nature of human and economic flows in west Africa. The new bloc was established in 2023 by the military juntas that took power in Burkina Faso, Mali and Niger, in reaction to the sanctions imposed by Ecowas.

Because Sahelian countries have hardly any industries, they import much of what they consume from the west African and global market, particularly from China. Much of the cement, petroleum products, cars, textiles, wheat, rice and plastics sold on the markets of Niamey, Ouagadougou and Bamako were produced elsewhere. They depend on the ports of the Gulf of Guinea to import them.

Read more: Mali, Burkina Faso and Niger want to leave Ecowas. A political scientist explains the fallout

Coastal countries are far from being self-sufficient too. They import large quantities of onions from the Sahel, for example. They also benefit enormously from import-export trade with the landlocked countries of the Sahel.

Some of them have transformed into “entrepot economies”. These are trading ports where goods from the world markets can be imported and stored before being re-exported with no customs duties imposed. Benin, for example, is specialised in importing goods that will eventually be re-exported illegally to neighbouring countries where they are banned or subject to heavy taxes, such as Nigeria and Niger.

The consequences

Withdrawing from Ecowas is likely to have major consequences on the regional economy as a whole. Because of their landlocked situation, however, Sahelian countries will be more affected than the rest of the region by the reintroduction of tariff barriers. Without free access to the ports of Cotonou, Lomé, Abidjan or Tema, Sahelian imports will be far more expensive.

Informal trade is already the dominant form of economic exchange in the region. This will probably experience an unprecedented boom, particularly along the borders between Niger and Nigeria.

In addition, leaving Ecowas and its free movement protocol could have catastrophic consequences for millions of Sahelians who live in – or wish to migrate to – coastal cities. Migration is mostly intra-regional in west Africa. Sahelians mostly tend to migrate to the Gulf of Guinea. Migrants from coastal countries go to Europe through the Sahara and, increasingly, to the US.