Structural Transformation of Economies of the Economic Community of West African States: An Empirical Analysis

Abstract

This paper analyses the structural transformation process of ECOWAS economies through an exploratory approach of stylized facts analysis on added value, employment, productivity and intra- and inter-sectoral mobility of labour factor, followed by an econometric approach in balanced panel data from 1991 to 2017 for the 15 countries in the region. The analysis revealed the beginnings of a structural transformation process in some ECOWAS economies, especially Ghana, Nigeria and Senegal, and more or less Burkina Faso and Guinea. The positive effects of the mobility of labour factor, albeit timid and at slow pace, from the agricultural sector to the industrial (manufacturing industry mainly) and services sectors, could be limited, on the one hand, by the low level of human capital development and on the other hand by a reverse itinerary characterized by the hegemony of the activities of the service sector, in terms of the proportion of value added and employment. In this regard, it appears that reforms aimed at strengthening the development of human capital could contribute to the acceleration of the productivities of industrial sector activities in general and manufacturing in particular through the channel of the accumulation of knowledge, know-how and technology. Economies could thus benefit from the growing prospects of attracting FDI in relation to the growing economic and geopolitical interests of foreign investors for Africa in general and ECOWAS in particular.