BY PRINCESS MEDIATRIX N.CHIGBO
The Economic Community of West African States (ECOWAS), one of Africa’s foremost Regional Economic Communities (RECs) that was birthed by the Treaty of Lagos 1975, clocked 48 years on 28th May 2023. The treaty of Lagos was one of the few legal unification instruments initialed by an unprecedented number of heads of state at a sitting. The Heads of State and Government of fifteen West African Countries established the Economic Community of West African States (ECOWAS) when they signed the ECOWAS Treaty on the 28th of May 1975 in Lagos, Nigeria.
The Economic Community of West African States (ECOWAS) Treaty is a multilateral agreement signed by the member states that made up the Economic Community of West African States.
Reaffirming the Treaty establishing the Economic Community of West African States signed in Lagos on 28 May, 1975 and considering its achievements; conscious of the over-riding need to encourage, foster and accelerate the economic and social development of our States in order to improve the living standards of our peoples; and bearing in mind the African Charter on Human and People’s Rights and following the Declaration of Political Principles of the Economic Community of West African States adopted in Abuja by the Fourteenth Ordinary Session of the Authority of Heads of State Government amongst other trite considerations, the LAGOS TREATY was duly revised on 6 July 1993
ECOWAS aims to promote cooperation and integration. It aims to establish an economic union in west Africa in order to raise the living standards of its peoples, and to maintain and enhance economic stability, foster relations among member states, and contribute to the progress and development of the African continent.
ARTICLE 3 of the revised ECOWAS Treaty embodies the aims and objectives of the Community.
The aims of the Community are to promote co-operation and integration, leading to the establishment of an economic union in West Africa in order to raise the living standards of its peoples, and to maintain and’ enhance economic stability, foster relations-among Member States and contribute to the progress and development of the African Continent.
2. In order to achieve the aims set out in the paragraph above, and in accordance with the relevant provisions of this Treaty, the Community shall, by stages, ensure;
a) the harmonization and co-ordination of national policies and the promotion of integration projects and activities, particularly in food, agriculture and natural resources, industry, transport and communications, energy, trade, money and finance, taxation, economic reform policies, human resources, education, information, culture, science, technology, services, health, tourism, legal matters;
b) the harmonization and co-ordination of policies for the protection of the environment; c) the promotion of the establishment of joint production enterprises; d) the establishment of a common market through; i. the liberalization of trade by the abolition, among Member States, of customs duties levied on imports and exports, and the abolition, among Member States, of non-tariff barriers in order to establish a free trade area at the Community level;
ii. The adoption of a common external tariff and a common trade policy vis-à-vis third world countries; iii. the removal, between Member States, of obstacles to the free movement of persons, goods, services and capital, and to the right of residence and establishment; e) the establishment of an economic union through the adoption of common policies in the economic, financial, social and cultural sectors, and the creation of a monetary union. f) the promotion of joint ventures by private sector enterprises and other economic operators, in particular through the adoption of a regional agreement on cross border investments; g) the adoption of measures for the integration of the private sectors, particularly the creation of an enabling environment to promote small and medium scale enterprises; Such was the zeal, commitment and resolve of the ECOWAS founding fathers that they did not allow cosmetic colonial barriers of language, colonial history, or orientation to put them asunder in actualizing their dream of a pan-African regional integration.
In his anniversary message to the staff, Dr Omar Alieu Touray, President of the ECOWAS Commission enthused that “The 4×4 Strategic Objectives of the ECOWAS Management were designed to respond to the challenges in our community and exploit opportunities for growth and development’’. The strategies are to enhance peace and security; good governance and political stability; deepening regional integration and inclusive and sustainable development. He further stated that …““For 48 years, our sense of community has remained solid in the face of challenges, and our commitment for inclusive and sustainable development has remained strong,” But is this truly the case in reality. Have the ideals espoused in the ECOWAS Treaty been met. Sadly, some five decades after its inauguration, the regional bloc is still struggling with almost the same or similar challenges that almost scuttled it shortly after take-off. Under its flagship Protocol on Free Movement of Persons, Rights to Residence and Establishment of businesses and trades, ECOWAS has been the only region in Africa where citizens can visit and stay in a country other than their own for at least 90 days without a visa. But even that protocol is yearning for urgent fine tuning in its implementation, given that some member States now charge Community citizens compulsory “airport levy,” in violation of Community protocols.
A community with a 15 member State and a vast population of over 400 Million, West Africa is ripe for doing business. Agriculture is the main economic driver and the region has one of the fastest growing uses of mobile phones and digital technology. Women also play important roles that contribute to economic growth. Harnessing the above factors to catalyze sustainable business ventures will improve the lot of the larger population in line with objectives of the Treaty. A few challenges, however, prevent West African businesses from reaching their full potential. Notable among these are: 1) inadequate access to business friendly financial support mechanisms; 2) modern business development services; 3) networking and linkages to larger markets; 4) enabling policies that foster adequate participation of vulnerable groups. Africa’s productive potential in order to trigger greater regional investment. Other constraints include inefficient transportation and trade barriers along corridors and at borders, a heavy reliance on family and informal sources of financing, and an insufficient supply of reliable and affordable power. These factors result in West African products being uncompetitive in the international market.
The question therefore arises as to how far and how well has this economic community gone in achieving its ideals of regional integration and realizing its great potential in trades, business investment and economic development from within and across borders and foreign investors.
There is no gainsaying the fact that West Africa’s population is growing and the opportunities for businesses to trade across the region are vast. In spite of this, economic growth rates in most of the countries are lagging and poverty remains high. Essentially, West Africa’s farmers and firms produce and trade in highly localized markets and do not achieve the sufficient economies of scale required to attract broad-based investments that could accelerate growth and reduce poverty.
This is due to a number of reasons. West Africa also has some of the longest road transportation times for travel between countries and some of the highest travel costs per kilometer of any region in the world. The region’s corridors are laden with administrative barriers such as cumbersome border and customs clearance processes, as well as formal and informal checkpoints and roadblocks that keep trucks stationary for extended periods of time. These are serious stumbling blocks to the region’s economic growth and development. Insecurities, incessant coups, political conflicts and instability which have their roots in bad governance, corruption, economic mismanagement, cronyism, election rigging, violation of human rights of citizens, clamping down on opposition and narrowing the democratic space, and mindless alteration of electoral laws and national constitutions for tenure elongation, among others, not to mention the now all too familiar challenges of terrorism, insurgency, religious extremism, piracy, elections-related violence, drug trafficking and the deadly virus called corruption. Elections also have become a major source of political conflicts in the region. At the moment, world attention is focused on Nigeria, the regional powerhouse following the legal challenge mounted by opposition parties against the outcome of the 25 February 2023 presidential election.
All these raise serious concerns to foreign investors. In addition, implementation of trade facilitation related policies such as the Trade Facilitation Agreement (TFA), the adoption and implementation of the ECOWAS Customs Code and the enforcement of the existing regional measures (like Common External Tariff and ECOWAS Trade Liberalization Scheme) are not yet fully enforced.
Corruption has a major impact on growth in low-income economies, while ease of doing business has a major impact on growth in developed countries.
And this is the crux of the matter: the ease of doing business in West Africa even after nearly a decade of being in existence. What is the index of ease of doing business in West Africa. The answer to this question is unfortunately in the abysmal low when compared with some other regions on the same economies of scale.
Economies around the world have taken steps making it easier to start a business by streamlining procedures that make for easier and faster ways of doing business with modern technology, while reducing capital start – up cost among other requirements. Many have undertaken business registration reforms in stages and often as part of a larger regulatory reform program. Among the benefits have been greater firm satisfaction and savings and more registered businesses, financial resources and job opportunities.
The ease of doing business is measured by the business regulatory environment of the economy which anchors on the following indices:
Starting business, Dealing with construction permits – Procedures, time, and cost to build offices and minimum capital to open a warehouse. Getting electricity – procedures, time, and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse,
Registering property – Procedures, time, and cost to register commercial real estate
Getting credit involves strength of legal rights index, depth of credit information index.
Protecting investors which verges on the indices on the extent of disclosure, the extent of director liability, and ease of shareholder suits. Paying taxes – Number of taxes paid, hours per year spent preparing tax returns, and total tax payable as a share of gross profit.
Trading across borders – Number of documents, cost, and time necessary to export and import. Enforcing of contracts – Procedures, time, and cost to enforce a debt contract
Resolving insolvency – The time, cost, and under a bankruptcy proceeding
Good practices – Provide insights into how governments have improved the regulatory environment in the past in the areas measured by Doing Business recovery rate (%).
It was introduced in 2003 covering 145 economies but has expanded to 190 economies worldwide. Ease of doing business is a combination of the indices based on ten factors which are: starting a business, obtaining construction permits, getting electricity, property registration, acess to credit, and minority investors protection. Others are tax-paying, cross-border tradings, contract enforcements and settling insolvency. There is no gainsaying the fact, that the ease of doing business elements where duly institute goes a long way towards enabling en-armoring of multinational companies who necessarily have to consider all the pros and cons of business indices and sub-indices prevailing in a given business climate before venturing into an investment in foreign country.
The elements that connect ease of doing business and economic development in a country or economic region include opportunities of employment, wealth sharing and creation among others. Ease of doing business contributes to the advancement of living standards and generates capital through entrepreneurial innovations that are environmental-friendly.
The Ease of doing business index ranks countries against each other based on how the regulatory environment is conducive to business operation and stronger protections of property rights. The ease of doing business index was an index created jointly by Simeon Djankov, Michael Klein, and Caralee McLiesh, three leading economists at the World Bank Group, following the release of World Development Report 2002. Higher ranking indicated better, usually simpler, regulations for businesses and stronger protections of property rights. Empirical research funded by the World Bank to justify their work shows that the economic growth effect of improving these regulations is strong.
But is this truly the case in reality. Have the ideals espoused in the ECOWAS Treaty been met. Sadly, some five decades after its inauguration, the regional bloc is still struggling with almost the same or similar challenges that almost scuttled it shortly after take-off.
Despite what progress made so far, West Africa remains overall a low-performing region with an average score of 52.3, below the global average of 63. Ten West African countries rank in the bottom 50, and only two African countries (Mauritius, rank 13 and Rwanda, rank 38) are among the top. In the ease of doing business, Nigeria ranked 131st out of 190 countries in 2019. Economies ranking from one to 20 have simpler and more friendly regulations for businesses. In Africa, the best country for doing business is Mauritius, which ranks among the first countries worldwide.
CONCLUSION
In conclusion, adopting the words of Mr. Paul Ejime, a Global Affairs Analyst, it is submitted that “ Moving forward, ECOWAS has to work with member States to improve governance at all levels, ensure political stability, harmonization of national policies, laws, and regulations for the consolidation of regional integration and economic prosperity. Member States must also respect treaty obligations, with the same set of rules applied to all violators of regional instruments and protocols.
SOURCES;
- Economic Community of West African States Treaty.
- worldbank.org, https://documents1.worldbank.org › pdf
- Revised ECOWAS Treaty (1993) – Investment Policy Hub unctad.org, https://investmentpolicy.unctad.org › treaties › othe
- Revised ECOWAS Treaty (1993) International INVESTMENT Agreements Navigator UNCTAD Investment Hub. Ecowas.int https.int.>uploads>2022
- Corruption and Ease of Doing Business – IDEAS/RePEc repec.org
- https://ideas.repec.org › vrs › auseab
- https://www.cbn.gov.ng › out › the impact of tr…
- The Impact of Trade on Economic Growth in ECOWAS Countries cbn.gov.ng, https://www.cbn.gov.ng › out › the impact of tr.
- ECOWAS @48, STILL BATTLING PEACE AND SECURITY CHALLENGES By Paul Ejime – a Global Affairs Analyst and Consultant on Strategic Communications, Media Development and Governance Issues, including Peace & Security and Elections.