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Political tensions shake up trade in West Africa

Political tensions shake up trade in West Africa

1 year ago
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Home Business & Economy

Political tensions shake up trade in West Africa

by Editorial Staff
1 year ago
in Business & Economy
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JUNTA-LED Mali, Niger, and Burkina Faso have formally withdrawn from the Economic Community of West African States (ECOWAS) as of Wednesday, marking a major shift in regional dynamics. Years of strained relations following military coups in these countries between 2020 and 2023 have culminated in their departure, leaving the bloc facing an uncertain future.

The three nations, now part of the Alliance of Sahel States (AES), severed ties with ECOWAS after the bloc imposed heavy sanctions in response to the coups. According to AFP, these measures forced the landlocked Sahel countries to reconfigure their trade routes and explore alternative economic partnerships.

Fractured trade routes

Before the fallout with ECOWAS, Niger relied heavily on Benin for its trade, with 80 percent of its freight passing through the port city of Cotonou, the closest port to Niamey. However, diplomatic tensions have disrupted this relationship.

Despite ECOWAS lifting its sanctions, Niger has refused to reopen its border with Benin, accusing its neighbour of hosting jihadist bases and attempting to ‘destabilise’ the Sahel nation.

Similarly, Côte d’Ivoire has experienced a decline in road freight through its port in Abidjan. A document from Côte d’Ivoire’s transport ministry attributed this downturn to the ongoing diplomatic crisis with the AES countries.

Togo and Guinea gain influence

While Benin and Côte d’Ivoire face strained relations with the AES, other West African nations have strengthened ties with the Sahel alliance. Ports in Lomé, Togo, and Conakry, Guinea, have become critical hubs for AES trade.

During the peak of ECOWAS sanctions against Mali in 2022, freight passing through Conakry surged by 243 percent compared to the previous year, according to a port representative in Bamako who spoke to AFP.

However, new trade routes come with significant challenges. For example, goods transiting through Togo to Niger must traverse dangerous and unstable regions plagued by jihadist violence.

Rising costs and economic pressures

Re-routing trade has also increased costs significantly. An OECD study published late last year found that the shift to alternative routes led to a more than 100 percent increase in logistics costs compared to pre-crisis levels. This has had a ripple effect on food prices, further straining local economies.

Traders in Senegal’s capital, Dakar, are divided over the implications of the Sahel nations’ exit from ECOWAS.

‘This is a problem between states,’ said Ousmane Diouf, a jewellery vendor who sources products from Mali, Niger, and Burkina Faso. ‘It won’t affect the supply of goods.’

Others, like Malian fabric seller Mohamed Konate, expressed concerns. ‘Customs duties have already increased in recent years,’ he told AFP. ‘There’s uncertainty on the horizon.’

A shifting regional landscape

The withdrawal of Mali, Niger, and Burkina Faso from ECOWAS is reshaping West Africa’s political and economic landscape. While the AES bloc seeks to assert its independence, the challenges of increased trade costs, regional instability, and strained relations with neighbouring countries remain significant hurdles.

As the Sahel states forge their own path, the question remains whether the fractured region can find common ground to address shared economic and security challenges.

 

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Editorial Staff

Editorial Staff

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