In a move that economists are calling a “silly own goal,” Burkina Faso, Mali, and Niger Republic have announced their withdrawal from the Economic Community of West African States (ECOWAS), potentially severing ties with the $702 billion-strong regional economy.
This decision, made by military coup leaders in the respective nations, has raised concerns about exacerbating existing challenges such as food insecurity and economic fragility in the region.
Charlie Robertson, the head of macro-strategy at FIM Partners, expressed his disbelief, stating, “The military coup leaders who control Burkina Faso, Mali, and Niger have managed to score the silliest own goal since the UK voted for Brexit.”
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He pointed out that this move would not only remove eight percent of ECOWAS’ GDP but also lead to increased tariffs and restrictions on the movement of goods and financial flows for the departing nations.
The joint statement released by the military leaders of Burkina Faso, Mali, and Niger Republic highlighted their dissatisfaction with ECOWAS, citing a departure from the organization’s founding principles and pan-Africanism.
This announcement has raised questions about the potential consequences for the region, particularly as these countries are among the poorest with an annual per-capita GDP of less than $1,000.
Economists fear that the exit may worsen the already widespread food insecurity in the region and backfire on fragile economies.
The International Monetary Fund’s chief economist, Pierre-Olivier Gourinchas, stated during a press briefing, “Having an integrated economic area is something that is going to be favorable, conducive to trade, and conducive to higher growth. And sort of moving away from this is going to have the opposite effects.”
With the departure of Burkina Faso, Mali, and Niger, there are concerns about the potential impact on trade, given that Ivory Coast, Ghana, and Nigeria dominate trade within ECOWAS. The move could weaken the $277.22 billion trade of ECOWAS with the rest of the world, in addition to diminishing the regional economic bloc’s contribution to the African Continental Free Trade Area.
As the situation unfolds, the International Monetary Fund continues to monitor the economic implications of this unexpected decision.