Mali, B’Faso, Niger risk exclusion from $702bn market

The potential exits of Burkina Faso, Mali, and Niger Republic from the Economic Community of West African States (ECOWAS) could lead to these countries being excluded from the $702 billion strong regional economy. This move may exacerbate food insecurity and further destabilize already fragile economies in the region. The Bloomberg report highlighted that these countries, being landlocked and among the poorest in the region, would face increased tariffs and restrictions on the movement of goods and financial flows if they exit the ECOWAS.

According to Charlie Robertson, head of macro-strategy at FIM Partners, the military coup leaders’ decision to exit the ECOWAS could have significant negative consequences. This decision would lead to a loss of access to markets like Nigeria and Ghana, amounting to a combined GDP of $467 billion, affecting eight percent of Ecowas’ GDP.

Exiting the economic bloc would result in losing the benefits of free movement of goods, capital, and people within the ECOWAS. The trade between its 15 members, which is currently dominated by Ivory Coast, Ghana, and Nigeria, remains relatively small at about $277 million but has the potential to grow up to as much as $2 billion over the next few years, according to the International Trade Centre.

The joint statement released by the military leaders of Burkina Faso, Mali, and Niger Republic expressed their grievances and sovereign decision to withdraw from the ECOWAS. Their withdrawal could weaken the $277.22 billion trade of ECOWAS with the rest of the world and its contribution to the African Continental Free Trade Area.

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The International Monetary Fund’s chief economist, Pierre-Olivier Gourinchas, addressed the situation, stating that the IMF is closely monitoring the potential impact of the exits. He emphasized the general advantages of having an integrated economic area and expressed concerns about the adverse effects of moving away from this arrangement.

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