• ’14% continental trade value set to plummet even further’
• It’s final nail on coffin of ECOWAS protocol, says Yusuf
• Nigeria, others expected to impose counter-tariffs
• Obiora warns of fresh spike in prices

Further consolidating their breakaway from the regional economic bloc earlier in the year, Mali, Burkina Faso and Niger have slammed a 0.5 per cent levy on imported goods, a decision that is expected to impact negatively on the already low intra-regional trade and weaken the Economic Community of West African States (ECOWAS).
  
The move, experts have said, is also a blow to the African Continental Free Trade Agreement (AfCFTA), which has seen a sluggish implementation a decade after it was adopted.
   
With intra-continental trade still very low and hovering at 14 per cent, trade experts are worried that the hasty decision by the Sahel states would have thrown a spanner into inter-governmental efforts embarked upon to address the tariff barriers.
 
Even if the saddening events do not affect the intra-West African trade volume in absolute terms, the region may lose the traction of trade formalisation, which saw Nigeria increasing its documented trade with some of the countries by hundreds of folds last year.
 
Sadly, the decision comes amid worry over the potential danger of the global tariff war for Africa, which must strengthen regional ties to prevent further economic subjugation.
  
The new levy, which will apply to all goods imported from outside the three countries, is effective immediately and is supposed to finance the countries’ newly formed union following their collective exit from ECOWAS.
   
The three West African nations, all governed by military juntas that rose to power through recent coups, launched the Alliance of Sahel States in 2023 as a security pact.
 
Over time, the alliance evolved into an aspiring economic union with plans to promote deeper military and economic integration, including the introduction of biometric passports.

None of the Sahel countries in question is among top 10 African countries Nigeria imports from in Africa. Last year, South Africa, Ivory Coast, Senegal, Cameroon and Togo, accounted for 90.95 per cent of exports to Africa. But Nigeria’s trade with the neighbouring countries has grown recently.

Nigeria’s trade with other ECOWAS countries is negligible. Last year, its import rose from N164 billion to N600 billion. As significant the growth may appear, it was a mere one per cent of the country’s total import.

Also, the export was N5.28 trillion as against N2.24 trillion recorded in 2023. The value of export to ECOWAS countries, including the Sahel region, was 6.8 per cent of the country’s exports.

Republic of Benin and Niger are seventh and ninth of Nigeria’s 10 top export partners. Last year, the country’s total export to Benin was N32.55 billion while that of Niger was N25.91 billion. Both are insignificant when compared with Nigeria’s export to South Africa.
  
The emerging tariff war in the sub-region, experts fear, could reverse the resurging trend and changing pattern of trade in the zone with the Alliance of Sahel States (AES) now being repositioned as the new frontier of trade barrier in West Africa.

The three countries had, last year, accused the regional bloc of failing to provide adequate support in combating Islamist insurgencies and resolving insecurity in their territories.
   
Reacting to the new development, Chief Executive Officer (CEO) of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said trade within the sub-region, especially between Nigeria and its immediate neighbours, is mostly informal.
 
“The levy, I strongly believe, would not have a significant impact on informal trade which, in this case, is higher than formal trade. The borders are porous, and most of the trade that takes place there is informal and undocumented.   
 
“The formal trade will be affected by this new levy imposition, but it is not so much when you look at trade within the subregion and our major trading partners within the sub-region. Look at our trading numbers with Niger; it is not that significant to affect us,” he said.   He added that total trade, imports and exports within the sub-region, is less than 10 per cent of Nigeria’s total trade and that, in terms of materiality, it is not very significant.
 
“Look at the cattle and animals brought in for festive periods. Are those trade numbers recorded? Does anyone pay taxes on them? Niger is landlocked and most of their goods come in from Nigeria and the Republic of Benin, most of which is undocumented. The levy would affect those countries more than us,” he said.
  
On the impact it will likely have on AfCFTA, he said non-tariff barriers present even more problems and burdens to ECOWAS states than levies and tariffs.
  
“To move a cargo of export across Benin Republic and Togo, exporters pay what is called ‘transit levy’ which runs into millions of naira. I believe the transit levy is even more than the newly-imposed 0.5 per cent levy that the Sahel countries introduced. Benin already banned some of our goods, ignoring the ECOWAS protocol and treaty. The respect for the protocol within the sub-region is extremely weak and almost non-existent now, and this levy is the final nail in the coffin for the ECOWAS treaty and protocol,” he said.
  
Also, Director-General of the African Centre for Supply Chain, Dr Madu Obiora, said the move was expected.    
 
“Since they do not belong to ECOWAS anymore, treaties like the ECOWAS Trade Liberalisation Scheme (ETLS) do not apply to them again, and this is expected. What this means is that imports from ECOWAS countries would be affected and I think the 0.5 levy is not so heavy.
  
“I do not know what is being done to bring them back to the regional bloc, but any more serious trade tariffs will significantly disrupt trade flow in West Africa. The economic sanctions imposed on them then did not yield any result and what we are seeing is a further fragmentation of.
  
“For traders that used to ship to the affected countries, this levy might affect their trade facilitation mechanisms. Over time, ECOWAS has been slightly divided between the English-speaking side and the French-speaking side, and this will only cause further divisions. Another thing is that they will start shopping for partners outside ECOWAS and Africa and the instant they get this, their position would be strengthened, and they would likely increase the duties and levies,” he said.

Expressing concern over the dwindling intra-African trade numbers of about 14 per cent, he said this number would likely plummet in the face of these additional barriers.
  
“Trade within Africa is already very poor, especially when compared to other continents. Africa has the lowest intra-continent and regional trading numbers in the world. However, instead of looking for new ways to dismantle old tariff and non-tariff barriers, new barriers are being erected on top of the old ones. Our regional trade is going to suffer even more,” he said.  He added that this also poses a security threat not just to trade but to other aspects and sectors.
   
“Those countries complained that nothing was done about insecurity across the sub-region, but this move will likely fuel insecurity and cause additional disruptions in cross-border trade. The three countries are landlocked nations and in retaliation, other countries might go on to impose counter-tariffs on them, increasing the cost of movement of goods across countries, which is already very expensive.
  
“The trio might also be forced to look for alternative trade routes if countries like Togo, a major trading route between West Africa and the rest of Africa, impose tariffs as well,” he said.