Can Niger, Mali & Burkina Faso afford to exit ECOWAS?

The recent decision by Niger, Mali, and Burkina Faso to exit the Economic Community of West African States (ECOWAS) has sparked concerns over the socio-economic impact on these countries. Charles Robertson, the Head of Macro Strategy at FIM Partners UK, has highlighted the potential consequences of this move, stating that it could further push the three nations into poverty. He emphasized the significant advantages that the regional bloc offers, serving as a buffer against tariff and non-tariff barriers. Robertson drew parallels between the Brexit scenario, where the United Kingdom departed from its closest trading partner, Europe, and the current situation in West Africa, where these countries are separating from a vital trading bloc. Despite still being part of the African Continental Free Trade Area and maintaining connections through the CFA currency with countries like Senegal and Cote d'Ivoire, the decision to withdraw from ECOWAS could have far-reaching implications. With a combined GDP market of $400 billion in Nigeria alone, the departure of Mali, Burkina Faso, and Niger raises questions about the wisdom of turning away from such a lucrative market. Robertson stressed the internal challenges facing these economies, such as alarmingly low levels of adult literacy ranging from 30 to 40%, hindering sustainable growth and development. He expressed concerns that blaming external entities like ECOWAS for internal issues deflects attention from the urgent need to address fundamental challenges like education. Additionally, the exit of these three countries represents a loss of almost 70 million people from the ECOWAS bloc, constituting around 8% of its GDP. While Nigeria accounts for over 50% of the bloc's GDP, the departure of these nations could still impact regional trade dynamics. Robertson highlighted the importance of trade blocs in eliminating not just tariff barriers but also non-tariff barriers that could impede trade flow, underscoring the negative consequences of isolating from such arrangements. The potential ramifications of this decision extend beyond economic considerations to affect the private sector's footprint across the continent. Robertson noted that the exit could diminish opportunities for companies operating in these nations, signaling a setback for businesses seeking growth in the region. Amidst geopolitical shifts towards alliances with countries like Russia, Robertson warned of the detrimental effects of such partnerships on the development prospects of Mali, Burkina Faso, and Niger. He emphasized that addressing critical issues like education and poverty alleviation should take precedence over aligning with external actors that may not contribute positively to long-term progress. The implications of the exit from ECOWAS on poverty levels in these countries are profound, with reduced access to a larger market exacerbating challenges already faced by vulnerable populations. By severing ties with a regional trade bloc like ECOWAS, these nations risk prolonging their struggle to escape poverty, as initiatives that could alleviate economic hardships are eliminated. Concerns linger about the future of the Eko currency convergence criteria, with doubts raised about the feasibility of a single currency union among countries with significant developmental disparities. While questions about currency valuation and exchange rate stability continue to linger, recent adjustments in currency values have signaled potential improvements in current account deficits and foreign investment...