Publications /
Research Paper

Back
Trade Integration in the Economic Community of West African States: Assessing Constraints and Opportunities Using an Augmented Gravity Model
December 28, 2018

This study assesses and compares the determinants of intra-trade in the Economic Community of West African States (ECOWAS) and the Association of Southeast Asian Nations (ASEAN).

Regarding the adopted methodology, we estimate two versions of the gravity model over intra-trade. For the two communities, the first model captures standard effects of the exporting and the importing economic size, the distance, contiguity, while the second model incorporates, as additional explanatory variables, the quality of infrastructure and the bilateral complementarity. The Pseudo Poisson Maximum Likelihood (PPML) technique is used to offset the systematic heteroscedasticity bias. The results show that the effort of export in ECOWAS captured through the elasticity to export is surprisingly higher than the ASEAN, once we control for the infrastructure and complementarity. Transaction costs, captured, inter alia, through the landlockness variable, are very informative in this case, as they has lost significance in the augmented gravity model mainly for the ECOWAS, meaning that what matters the most in this case is infrastructure base and complementarity index that allows the country to overcome geographic constraints. Then, we simulate the potential or the theoretical trade within the ECOWAS and compare it to observed data, using the coefficients estimated over the ASEAN. Results suggest that trade potential within the ECOWAS, remains below the potential given by the gravity model, especially for small economies in the community. This calls for pro-active strategic policies that aim to reap the benefits of trade liberalization and fulfill the potential. This comes through closing Africa’s infrastructure gap to reduce trade costs and the promotion of economic diversification. In fact, estimation results display higher sensitiveness to infrastructure and complementarity indexes in the ECOWAS than the ASEAN. Nonetheless, trade dynamics are more complicated and depend on several factors of which the centrality of local product competitiveness. The latter can indeed determine how far ECOWAS’s products can replace foreign products at least in the domestic market. A brief analysis of revealed comparative advantage (RCA) shows that aside from primary commodities, the majority of products imported by the ECOWAS are supplied by other countries who have a stronger RCA.

RELATED CONTENT

  • April 11, 2025
    Dans cet épisode, nous décryptons le retour en force du protectionnisme américain, incarné par Donald Trump à l'occasion de son second mandat, à travers sa stratégie "America First". Nous ...
  • Authors
    April 11, 2025
    Syria’s post-conflict transition, marked by the fall of the Assad regime and the appointment of interim President Ahmed al-Sharaa, will be a critical opportunity for renewal while confronting significant challenges. The country must navigate a complex landscape of political fragmentation, economic hardship, and security risks. This policy brief explores Syria’s prospects for reconstruction and long-term stability by assessing recent political reforms, economic recovery strategies, a ...
  • April 10, 2025
      Marcus Vinicius De Freitas Professor, China Foreign Affairs University Senior Fellow, Policy Center for the New South The Chinese government’s white paper, ‘China’s Position on Some Issues Concerning China-US Economic and Trade Relations,[1]’ issued on April 9, 2025, in response to the escalating tariffs imposed by President Donald Trump, is not just a diplomatic response to the escalating tensions with the United States. It is a meticulously crafted strategic document that pr ...
  • Authors
    April 8, 2025
    The Russia–Ukraine war, while primarily perceived as a European security crisis, has triggered deep structural shocks globally, disproportionately affecting the developing world—the “New South.” This essay explores how historical legacies, global economic dependencies, and shifting geoeconomic paradigms have converged through the war to exacerbate existing vulnerabilities in Africa, Asia, Latin America, and the Middle East. It critically examines the war’s impact through four interc ...
  • April 8, 2025
    رغم التحسن النسبي في بعض المؤشرات الاقتصادية الكبرى في المغرب، إلا أن التشغيل ما يزال الحلقة الأضعف في معادلة التنمية. في هذا السياق، أعلنت الحكومة المغربية عن خارطة طريق وطنية للتشغيل تهدف إلى خفض البطالة إلى تسعة في المئة وخلق مليون منصب شغل، بالإضافة إلى أربعمئة وخمسين ألف منصب شغل ف...
  • Authors
    Hermine Sam
    April 8, 2025
    The start of 2025 was marked by the official departures of Burkina Faso, Mali, and Niger from the Economic Community of West African States (ECOWAS). Now joined in a new organization, the Alliance of Sahel States (Alliance des États du Sahel, AES), the three countries have left ECOWAS facing a legitimacy crisis and concerns for its future. How these blocs decide to interact with each other will greatly influence the future of regional stability and foreign engagements. A divided W ...
  • April 4, 2025
    Les récentes élections au sein de l’Union africaine (UA) ont été défavorables pour le Maroc, qui a perdu face à l’Algérie le poste de vice-président de l’Union et n’a pas été réélu au Conseil de Paix et de Sécurité (CPS). Ce résultat a suscité de l’incompréhension et un sentiment d’échec pour la diplomatie marocaine. Cependant, l’article propose de dépasser cette vision émotionnelle pour analyser les mécanismes d’influence au sein de l’UA. La candidature marocaine évolue dans un env ...
  • April 04, 2025
    In this episode, we discuss with an economist how digital technologies like AI, blockchain, and autonomous ships are reshaping global trade and logistics. These innovations improve effici ...
  • Authors
    Nizar Messari
    April 4, 2025
    The rapprochement between the U.S. and Russia since the election of President Trump for a second term, and more significantly, since his inauguration, has intrigued U.S. traditional allies as well as many politicians in the U.S. The argument presented here explains the causes of that rapprochement and places it within a global context that witnesses the establishment of a new world order, multipolar, in which the U.S. is a key player but not the dominant player it used to be in the ...