ECOWAS And The Alliance Of The Sahel States Conundrum

The Financial Group of West African States (ECOWAS) is one in all eight Regional Financial Communities (RECs) acknowledged by the African Union (AU). Till September 2023, it had 15 member states. Nonetheless, Mali, Burkina Faso, and Niger introduced their withdrawal following the formation of the Alliance of Sahel States (AES), disrupting regional integration efforts.

Earlier than this disintegration, ECOWAS was one in all Africa’s most superior RECs. It had progressed right into a Customs Zone with a Widespread Exterior Tariff (ECOWAS CET) and agreed on a financial coverage, together with a proposed single forex, the ‘ECO.’ The ECOWAS Financial Cooperation Programme (EMCP) aimed to get rid of change charge volatility and improve commerce and funding flows.

Nonetheless, the exit of Mali, Burkina Faso, and Niger threatens these efforts. AES was shaped on September 16, 2023, by way of the Liptako-Gourma Constitution, as a response to the international locations’ suspension from ECOWAS following navy coups. This improvement presents not only a diplomatic problem but additionally an financial imbalance inside the area and throughout Africa. By January 2025, the withdrawal turned official, elevating questions on commerce and financial insurance policies, as these international locations have been a part of the West African Financial and Financial Union (UEMOA), which makes use of the CFA franc. If AES pursues different financial alliances, it might undermine ECOWAS’s ambitions for a unified forex and disrupt regional commerce.

ECOWAS maintains that its doorways stay open to those international locations within the “spirit of regional solidarity” and has instructed remaining members to honour free motion ideas till a transparent future engagement is set.

Challenges or Alternatives?

Regardless of ECOWAS’s goodwill, the emergence of AES creates an financial and geopolitical imbalance. Traditionally, ECOWAS has performed a key position in commerce negotiations, together with the African Continental Free Commerce Settlement and the EU Financial Partnership Settlement (EU-EPA). Whereas these agreements have been signed independently, ECOWAS members usually introduced a unified entrance, apart from Nigeria’s differing stance on the EU-EPA.

Past politics, ECOWAS has facilitated commerce liberalization, funding flows, and infrastructure improvement. The withdrawal of three landlocked states disrupts regional financial integration, notably in commerce and logistics. These international locations depend on coastal ECOWAS states like Côte d’Ivoire, Ghana, Togo, and Benin for port entry. New commerce preferences and potential boundaries might pressure provide chains, impacting agricultural and vitality commerce. Coastal states rely upon AES for livestock, whereas the Sahel imports refined petroleum and manufactured items from ECOWAS. A fragmented commerce system dangers inefficiencies and value volatility.

Funding confidence is one other concern. ECOWAS’s lowered market measurement and integration might deter international direct funding (FDI), notably as member states leveraged regional stability to draw buyers. Traditionally, Anglophone states have drawn extra FDI than Francophone ones as a consequence of authorized and linguistic variations, however ECOWAS’s collective power has been a key issue. The exit of AES international locations amplifies financial disparities, elevating considerations about commerce boundaries and regional instability.

The AES states’ rising ties with Russia and China might reshape West Africa’s geopolitical and financial panorama. This shift could introduce competing financial fashions, weakening ECOWAS’s affect. Historically aligned with EU financial insurance policies, ECOWAS has benefited from commerce facilitation, improvement support, and preferential market entry. AES’s potential realignment might alter these dynamics.

Infrastructure and connectivity are additionally in danger. The exit signifies that key regional tasks just like the Lagos–Abidjan Hall, Dakar–Bamako railway, and Nigeria-Morocco Fuel Pipeline face uncertainty. These initiatives have been designed to reinforce inter-regional commerce relations and vitality safety. AES states prioritizing impartial financial methods might trigger delays, tariffs, logistical challenges and probably undermine regional integration and provide chain effectivity.

The West African Energy Pool (WAPP), geared toward integrating electrical energy provide throughout the area, may additionally fragment, exacerbating regional vitality insecurity if AES international locations pursue impartial vitality methods. These political rifts will additional pressure financial ties, including burdens to already fragile socio-economic situations. ECOWAS should navigate these challenges to keep up stability, commerce continuity, and financial cohesion amid AES’s divergence.

Remedial Actions

West Africa includes largely underdeveloped states, with a mixed per capita earnings estimated at $1,600. Socioeconomic challenges persist, together with low entry to high quality healthcare, insufficient infrastructure, and excessive poverty charges. Whereas the sovereign rights of States can’t be denied, exercising this proper comes with delicate implications, particularly in an period of rising interdependence amongst nations within the ever-evolving international financial system. It’s, due to this fact, not in the perfect curiosity of ECOWAS and the AES to interact in actions that may exacerbate the present socio-economic challenges.

ECOWAS continued management within the area will rely upon its capability to reaffirm financial and political cohesion by strengthening unity amongst remaining member states to forestall additional fragmentation and guarantee coverage continuity and predictability of the funding setting to keep up regional financial attractiveness.

The regional bloc will now greater than ever must show its capability to reinforce commerce and infrastructure integration by fast-tracking the completion of key regional commerce corridors, together with the Lagos-Abidjan Hall, Dakar-Bamako Railway, and Trans-Sahel Street in addition to safe different financing for vital vitality tasks, such because the Nigeria-Morocco Fuel Pipeline and West African Energy Pool (WAPP), making certain sustained vitality safety.

Moreover, ECOWAS should as a matter of urgency discover progressive methods to mitigate investor considerations and increase financial resilience by implementing clear coverage frameworks that align with current ideas and evolving international developments to guarantee buyers of continued financial stability and discover different intra-ECOWAS commerce routes in addition to financial partnerships.

Lastly, ECOWAS as a regional bloc should prioritise strengthening regional safety cooperation to handle the safety considerations that influenced the withdrawal of AES states by reinforcing ECOWAS’s position in counterterrorism, border safety, and regional stability. The regional bloc should discover methods to foster collaboration with worldwide companions to develop a sustainable safety and financial framework that aligns with the area’s long-term objectives.

Wanting Ahead

The emergence of AES alerts a transparent intent by its member states to pursue a definite socio-political and financial agenda. Whereas the AU’s place presently stays largely as an observer calling for restraint and renewed dialogue by each events, there would nonetheless be a restrict to the extent to which the AU can maintain again in recognising the brand new REC contemplating the proliferation of RECs inside the continental physique.  The chance that this alliance will redefine regional partnerships, worldwide commerce preferences and financial insurance policies is excessive, probably resulting in shifts in commerce agreements, funding preferences, and safety cooperation.

ECOWAS should act swiftly to protect its financial affect, guarantee infrastructure continuity, and preserve regional stability. This consists of retaining diplomatic channels open with AES whereas advocating for AU-mediated negotiations to forestall commerce and safety disruptions.

Whereas the withdrawal of Mali, Burkina Faso, and Niger might have been prevented, the challenges now lie in managing its repercussions on regional improvement. ECOWAS and the AU should take a realistic method, prioritizing management and coverage steerage over coercive measures.

As Africa’s largest political and financial bloc, the AU performs an important position on the worldwide stage. Nonetheless, its lack of cohesion and weak management usually undermine continental progress. ECOWAS’s response to the Alliance of Sahel States formation will check its capability to adapt to evolving geopolitical realities and decide the long run trajectory of West African integration.