Economic Community Of West African States Countries Research Articles

Negotiating Economic Partnership Agreement between EU and ECOWAS : Implications for West African Integration

European Union (EU) and Economic Community of West African States (ECOWAS) have been negotiating Economic Partnership Agreement for over fourteen years without significant progress. The stalled negotiation is affecting integrative initiative of ECOWAS vision 2020:20. This study not only interrogated the prolonged negotiations of the economic partnership agreement between EU and ECOWAS but also investigated the reasons for the prolonged negotiations and its implications for West African integration. The study adopted a combination of historical and descriptive survey designs. The population for the study was the ECOWAS member states. Qualitative data,, supported by structured and unstructured interviews will be applied. Secondary data would be obtained from relevant books, Internet and other documents from EU and ECOWAS secretariats. Descriptive statistics and content analysis will be used in analysing the data. The study adopted Zartman theory of the weak versus the strong and neo functionalism. The study found out that the unfavourable clauses and selfish interests among the ECOWAS leaders are prolonging the EPA among other factors. The study recommended that ECOWAS countries must eschew self interest, overcome issues associated with distrust among member states, mobilise and sensitise patronage and consumption of local products amongst others, in order to promote integrative economic partnership negotiation and trade bloc

The currency union effect on intra-regional trade in Economic Community of West African States (ECOWAS)

Purpose– The purpose of this paper is to investigate the currency union (CU) effect on aggregate intra-trade in the Economic Community of West African States (ECOWAS) and on bilateral trade among individual countries using the gravity model.Design/methodology/approach– Using panel dynamic ordinary least square, we examined the short- and long-run CU effect on aggregate intra-ECOWAS trade and bilateral trade among ECOWAS countries from 1995 to 2010. Chow poolability test was conducted for the appropriateness of pooling the cross-section parameters as against individual model. The augmented Dickey–Fuller (ADF) test; the Phillips–Perron (PP) test; and the Kwiatkowski, Phillips, Schmidt and Shin (KPSS) test were conducted on the individual data series, and the Levin, Lin and Chu test; the Im, Pesaran and Shin test; the Breitung test; and the Hadri test were used for testing cross-sectional independent panel unit root tests. Kao panel cointegration test was conducted to identify long-run relationships.Findings– We found evidence of significant positive CU effect on aggregate intra-ECOWAS trade. The estimates also show that Benin, Burkina Faso, Niger, Senegal and Togo trade more with countries they share common currency with than what they would have been in both short and long run. We again observed that CU is insignificant in explaining Cote d’Ivoire, Mali and Senegal intra-trade with ECOWAS countries, though their observed intra-trade with ECOWAS is relatively high which is found to be explained by export diversification.Practical implications– The findings reveal that CU is good for aggregate intra-regional trade though some individual members respond negative to CU. The finding of diversification as a necessary tool to increase intra-regional trade imply that as effort of introducing single currency is being pursued rigorously, effort to diversify export or trade complement should not be overlooked.Originality/value– There exist panel studies on CU on aggregate intra-regional trade in ECOWAS. However, there is a need to have country level study to identify CU effect on each country, as it is sensitive to country-specific factors which are unobservable in time series analysis of group of countries. Also, our group estimate differs in methodology in the sense that the dynamic generalised least takes care of endogeneity in trade gravity literature.

Have BITs driven FDI between ECOWAS countries and EU?

Purpose – Given the inconclusive evidence in the literature on the impact of Bilateral Investment Treaties (BITs) on Foreign Direct Investment (FDI) flows, as well as dearth of literature on this subject matter as regards West Africa and the European Union (EU), the purpose of this paper is to investigate the extent to which BITs and preferential trade and investment agreements (PTIAs) triggered foreign investment flows particularly between the Economic Community of West African States (ECOWAS) countries and the EU.Design/methodology/approach – Trend analysis was used to trace the link between FDI and BITs, while panel regression models were used to investigate the impact of BITs on FDI during 1980‐2010.Findings – Econometric results indicate that, as in most previous studies, BITs have strong positive impact on FDI in West Africa, with this impact significant at a higher level (1 per cent) for FDI flow than stock (5 per cent). The impact of BITs on FDI is significant even with the state of internal facto...

The Impact of Foreign Direct Investment on Economic Growth in the Economic Community of West African States

The main objective of this study is to determine the impact of Foreign Direct Investment (FDI) on the economic growth of the countries of the Economic Community of West African States (ECOWAS). The study utilised the fixed effects model to estimate regression coefficients of all ECOWAS countries between 2000 and 2009. The FDI-income ratio, exports and human capital were found to be positively related to economic growth. An important policy recommendation is that ECOWAS countries should provide adequate legal and institutional frameworks to protect foreign investors, improve governance, and ratchet up investment incentives to boost FDI inflows and accelerate economic growth. Keywords: Foreign direct investment; Economic growth; Fixed effects model; ECOWAS JEL classification : E22, F21, F43, C33, C32

African Growth and Opportunity Act (AGOA) and Economic Community of West African States (ECOWAS) regional trade: Challenges and prospects

The African Growth and Opportunity Act (AGOA) is a US trade act that has significantly enhances US trade with about 39 Sub-Saharan (SSA) countries. However, despite the opportunities in the trade program ECOWAS countries have not benefitted much from the available opportunities in the program. The mission of this paper is to look at why ECOWAS countries have not been able to capture the opportunities of AGOA significantly, from the perspective of process product methods (PPM) standards and what need to be done by ECOWAS to take advantage of the opportunities presented by the program. Therefore, this paper advocated some recommendations to ECOWAS leaders and other policy makers ECOWAS countries should strengthen their current position on trade and investments by expanding the list of their products on AGOA to include some more processed agricultural products that are deemed import-sensitive. Similarly the pre-conditions for eligibility into AGOA should be relaxed; especially protection of workers’ rights, intellectual property rights etc, due to the low level of trade from the region as most firms in the region are at infant stage and may be costly for them to carry out reforms in their operation areas, as they need time to do this. Furthermore, the use of trade preferences as a tool to promote foreign policy objective by USA will not produce significant benefits in terms of enhancing the regions trade and overall economic performance, the exclusion of Cote d’Ivoire is a reference point. Further studies can be carried out especially on the need for trade expansion among countries in the region and on knowledge management in ECOWAS states. Key words: African Growth and Opportunity Act (AGOA), Economic Community of West African States (ECOWAS), trade, exports.

Higher education as an emerging strategy for actualising the vision 2020 of the Economic Community of West African States (ECOWAS)

The Economic Community of West African States (ECOWAS) has just rolled out a document spelling out five major social, economic and environmental goals it wishes to achieve by 2020. These goals are lofty indeed but they can be achieved only with reliance on not only an enlightened citizenry but on 40% of the population that should have received university training. Consequently, university education within the sub-region is to be reappraised with the view to positioning West Africa for the actualisation of the vision. The task of revitalising university education within the countries making up ECOWAS will no more be a difficult one because, the World Bank and major development partners in the world, having discouraged for many years African leaders from embarking on a development of a higher education structure, have just affirmed their commitment to helping Africa develop a virile and relevant higher education system. Although Africa and West Africa have now been assured of the support of international development partners, finance and cost of university education would still remain a challenge for some time to come; four ways of minimising the effects of this financial challenge on the actualisation of ECOWAS vision 2020 should come through 1.) the acceptance of international development partners to supply ECOWAS countries with initial technological infrastructure that will reduce university education cost 2.) The development of a strong distance education network 3.) raising the number of teaching contact periods per academic staff and 4.) through exploiting all available cheap sources of electric energy for the purpose of ensuring steady and expanding supply of this energy. Key words: Higher education, university education, ECOWAS vision 2020, actualisation strategy.

Is Per Capita Growth in Africa Hampered by Poor Governance and Weak Institutions? An Empirical Study on the ECOWAS Countries

Abstract: This paper proposes an empirical study of the links between poor governance, weak institutions and the growth of per capita income in the countries that belong to the Economic Community of West African States (ECOWAS). We estimate a conditional beta‐convergence model using panel data. We find that variables such as the rule of law, property rights, the regulatory burden, political violence, and government ineffectiveness hinder growth in these countries. An interesting question is then the following: what can the countries do to improve their situations? To answer this question, we give several examples (Ghana, Nigeria and the NEPAD) of measures that are undertaken in order to strengthen the institutions and improve governance.

Is Per-Capita Growth in Africa Hampered by Poor Governance and Weak Institutions? Examining the Case of the ECOWAS Countries

This paper is an empirical study suggesting that poor governance and weak institutions may be part of the explanations to the low performance of the Economic Community of West African States (ECOWAS) in terms of per-capita GDP. We use a beta-convergence model that includes governance indicators, in addition to the classical determinants of growth. The study relies on panel data over the period from 1995 to 2004 and we compare the estimates of the GLS and GMM estimators. We find a strong evidence that poor governance reflected by the rule of law, property rights, regulatory burden, political violence, government effectiveness impede the growth of per-capita revenue. We also discuss some case studies of countries adopting policies to strengthen their institutions.

Potential impacts of the proposed West African monetary zone on cowpea trade

AbstractMember countries of the Economic Community of West African States (ECOWAS) are expected to form a West African Monetary Zone (WAMZ) by December 2009, whereby members would use a common currency in an attempt to promote regional integration. Evidence suggests that reduction in transaction cost as a result of a decrease (or elimination) of nontariff barriers (NTBs) and real interest rates in response to elimination of exchange rate differentials positively influence trade. The objective of this study is to quantify the effects of (a) a 7% real interest rate on capital and (b) zero NTBs within ECOWAS countries, on cowpea (Vigna unguiculata (L.) Walp) trade to provide a measure of the potential impacts of the WAMZ on grain trade. The study applies a spatial and temporal price equilibrium model formulated in a mixed complementary programming (MCP) framework and solved using GAMS/PATH. The focus is on the Nigerian cowpea grainshed (NCG) comprising Benin, Burkina Faso, Côte d'Ivoire, Ghana, Mali, Niger, Nigeria, and Togo in ECOWAS, and Cameroon, Chad, and Gabon in the Central African Economic and Monetary Community (CAEMC). The results show that if WAMZ results in reduced real interest rates within ECOWAS, the larger of the two monetary unions, consumers in the relatively larger coastal economies and producers in the smaller Sahelian economies would benefit while all others lose. However, net social welfare would increase by 0.19% over the base case of 6.3 billion US$ (bUS$). Removing NTBs among countries in the larger trading bloc may alter the pattern of cowpea flows with total trade volume increasing by 3%, but inter‐bloc trade decreasing by about 8%. The net total regional social welfare would increase by 0.14%, or 15 million US$ (mUS$), benefiting only consumers in importing countries and producers in exporting countries. The results emphasize the importance of specialization based on regional comparative advantage, but also draw attention to the need to devise ways to ensure acceptable welfare distribution among producers and consumers in line with policy objectives of the individual countries within the proposed WAMZ. Finally, this article contributes to the literature on the application of spatial and temporal models incorporating both ad valorem tariffs and differential interest rates in developing economies.