Trade Relations and Trade Openness amongst the ECOWAS Member Nations

Abstract

This study is necessitated by the belief that, there is an improved trade relation amongst West African countries following the establishment of a Regional Economic Community– the ECOWAS. In this regard, so much has been said about the trade bloc, but we are yet to feel its impact on the regional economy. Thus, this study is set to ascertain the nature of trade relations, impediments to trade and means of improving on trade liberalization within the sub–region .An ex-post facto research study was adopted in the study. It made use of secondary data for the period 2000 to 2019. Descriptive statistics, percentages and granger causality tests were utilized in estimating the time-series statistics. Outcome of the study indicates that there is still a low level of trade amongst the ECOWAS member states. The average total imports and exports from the ECOWAS trading bloc for the period under review stood at 7.1% and 20.10% respectively. This is considered rather poor! Reasons adduced to this effect are that regional trading arrangements still retains the specified patterns which consist of primary products and assume low levels of international sale. The sub-regional sale volume is low as they export raw materials and not processed goods. There is little that they are interested in importing from each other. Again because of the limited diversity of products, the same primary products also tend to dominate her trade with the rest of the world. It was also ascertained that there is a low level of trade liberalization within the ECOWAS sub region. Most of the member states were ranked lowest in terms of trade openness in the continent and the world at large. The study therefore recommends that apart from the new wave of increased interest in regional integration and removal of trade barriers, there is need for a major shift – ECOWAS member nations must play down on the continued dominance of primary production, export and low value addition. Regional trades need to be driven by a diversified production structure essentially driven by growth in manufacturing that would deliver lots of jobs, raise productivity and incomes; else intra regional trade will remain fragile, unadoptable and therefore more susceptible to major disruptions. Poor trade relations are likely to persist in the sub–region without a robust manufacturing sector where innovation and technology would improve value addition and raise productivity.