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ECOWAS: Good cop, bad trader

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ECOWAS: Good cop, bad trader

The West African regional authority ECOWAS is arguably the continent’s most effective intervention force, managing most recently to avert a bloody crisis in The Gambia. Its  efforts at economic integration, however, are lacking. That may be misleading, argues Rafiq Raji

Over 40 years ago, 15 West African countries decided to build an economic future together. But the aptly named Economic Community of West African States (ECOWAS) has failed to live up to that dream. Forced into action by necessity, it has proved to have a more effective role policing the region than as a trade facilitator. Its most recent triumph in The Gambia – whose longtime erstwhile leader Yahya Jammeh chose an intransigent path, after losing a presidential election that would have extended his incumbency to at least a quarter of a century – begs the question of why ECOWAS has not succeeded similarly with its primary aim: economic integration.

Besides, how did ECOWAS’s military interventionism in Liberia, Sierra Leone and most recently in The Gambia prove to be quite effective when supposedly more capable multilateral peacekeeping efforts like the African Union Mission in Somalia (AMISOM), United Nations Organisation Stabilisation Mission in the Democratic Republic of Congo (MONUSCO) and Multidimensional Integrated Stabilisation Mission in Mali (MINUSMA), have proved less successful?

Less complex dynamics may be why, especially as ECOWAS salvage missions have thus far taken place in its relatively small Anglophone member countries. And when faced with amorphous and transnational security threats from such terrorist groups as Boko Haram in northeast Nigeria, Niger and Cameroon, Islamic State in the Greater Sahara (ISGS), ECOWAS has been less keen to intervene. This has also typically been the case when the troubled member country is Francophone.

For instance, when Ivorian president, Laurent Gbagbo, who having been declared to have lost the 2010 presidential elections, used the courts to overturn the results in his favour, the regional body was palpably not important in the scheme of things. France has typically played the role of white knight for Francophone Africa, albeit in this particular Ivorian case, Gbagbo’s rival, Alassane Ouattara, had capable militia of his own; who after clinching victory were inducted into the country’s army but six years later, have become a stone in his shoe, perennially mutinous over pay.

However, ECOWAS did intervene in the 2012 Malian crisis and was crucial to calming tensions in Burkina Faso, after the forced removal of longtime president, Blaise Compaoré in 2014. Most times though and under the aegis of ECOWAS, regional behemoth Nigeria has been for troubled Anglophone countries what France has been for Francophone ones. So although ECOWAS has proved effective in the security and  political spheres, the region’s colonial divisions have limited its scope of influence, and its economic integration.

Multilateral trade agreements impede progress

When African governments should be looking at means for increasing their intra-regional trade bonds, they have distractions such as the European Union’s (EU) Economic Partnership Agreements (EPAs). As they are also members of the World Trade Organisation (WTO), which commits members to not enacting protectionist trade measures, African countries literally have their hands tied. Superior finished goods from already developed markets, in the absence of such measures, are preferred by African consumers.

In 2010 ECOWAS spent a fifth of its budget on security, the most on any single sector.

That the EU is West Africa’s largest trade partner, a relationship it seeks to entrench even more with the EPA, means it is not in its best interests to see more intra-West African trade. Essentially, the EPA preserves the status quo: the export of commodities and the import of finished goods from Europe. To the extent that ECOWAS countries seem desirous of signing the EPA, however, it is likely that even the currently meagre intra-regional trade may diminish even further. The argument that allowing exporters unfettered access to the region’s markets would essentially sound the death knell for its still floundering industries has some merit.

Still, there is far more trade that goes on between countries in the region than is reflected in official data. Cocoa farmers in Ghana and Côte d’Ivoire smuggle their produce across each other’s borders in search of better prices.

And the re-export of goods – used cars in particular – imported into Benin Republic, to Nigeria, is a major source of revenue for the former’s government. Unfortunately, the booming re-export trade escapes the payment of duty on the Nigerian side. Consequently, the Nigerian Customs Service announced in 2016 that all used cars would now have to come exclusively via its sea ports from 2017. Should smaller country groupings within ECOWAS like the Mano River Union (Sierra Leone and Liberia and Francophone Guinea and Côte d’Ivoire), succeed in their economic integration activities, then doing so on a broader regional level should eventually come about naturally. But the role of accelerating that process lies with Nigeria, its biggest and richest member, achieving almost 80% of the region’s $675bn GDP and with more than 50% of its 340 million population. Were it to lead on the economic front as it has done rather successfully with the region’s military interventionism, the economic integration process could well accelerate. But it has had the rather mixed fortune of having vast crude oil reserves, and there have been only half-hearted attempts at “diversifying” its economy.

An industrialised West Africa that trades with itself would likely only materialise on the back of progress in Nigeria. But Francophone members of ECOWAS have found it difficult to unhinge themselves from France as they are largely integrated with each other, sharing a currency and central bank, and are less enthused by an ECOWAS common currency and other economic integration initiatives. However, even some Anglophone neighbours create trade obstacles for themselves.

Nigerian traders in Ghana are regularly harassed by Ghanaian authorities. There is also a general fear for smaller countries about being dominated by their bigger counterparts. Regardless, countries in the region must first industrialise as a precursor to any economic integration. And to do so, they must first solve the power supply deficit problem.

Examples of regional initiatives to address this are the West African Power Pool and West African Gas Pipeline projects.

No manufactures, no trade

Despite relatively high mobility across the region, a common external tariff (since 1 January 2015), and palpably significant informal trade, West African countries barely trade with one another. Intra-West African trade is a meagre 11% of the value of total trade with third countries. Once, Anglophone and Francophone neighbours scarcely had direct flights. That this has changed is progress in itself.

In the past, visiting a Francophone neighbour, a Nigerian, say, would have involved travelling via Paris in distant Europe. Discordant colonial legacies continue to weigh significantly on achieving closer trade ties. Empire-building, characterised by grandiose nationalistic projects of doubtful utility, carried out under the cloak of sovereignty, has also been a major obstacle.

Still, the primary reason West African countries do not trade with each other as much is because they produce similar goods, mostly primary commodities. Odious corruption at borders and myriad checkpoints on trade routes also increases the cost of goods, making them less competitive with relatively cheaper imported items from Europe, Asia and elsewhere. Member countries’ governments could do a better job of cleaning up their borders, at least. The private sector may prove a better catalyst for trade, though.

A few examples are worth considering. Nigerian banks have spread across the ECOWAS region, in both Francophone and Anglophone countries. Strides by multinational companies like Singaporean agricultural commodities producer Olam and Nigerian industrial conglomerate Dangote also prove private actors can take over in the space where government actors stop having an influence.

And unlike their European counterparts with West African operations, who spread across the region too, essentially extracting primary commodities to export for value addition in their home countries, these indigenous companies trade within the region and the broader African continent, creating their products themselves.

Should further regionally ambitious but indigenous manufacturers emerge, intra-West African trade may finally get the much-needed lift it needs.   

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Written by New African Magazine

For over 45 years New African provides unparalleled insights and analysis on African politics and economics, via an African perspective, always. With in-depth monthly reports, New African brings Africa closer to the world and is ideal for those looking to gain a better understanding of the most important issues affecting Africa.

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