Mali, Burkina Faso, and Niger have announced a 0.5% levy on imported goods from the Economic Community of West African States (ECOWAS) member nations, including Nigeria, in a move that is expected to further strain relations with the regional bloc.
The levy, which takes effect immediately, is aimed at funding the newly formed Alliance of Sahel States (AES)—the three-nation military bloc that broke away from ECOWAS earlier this year.
The decision marks a significant departure from the long-standing free trade agreements within West Africa and signals a new phase in the economic realignment of the three Sahel nations, which have been governed by military juntas since their respective coups.
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While junta leaders claim the levy is necessary to sustain their alliance, economic analysts warn that this new tariff could backfire, ultimately harming their fragile economies by driving up prices and discouraging cross-border trade.
The Alliance of Sahel States was initially established in 2023 as a security pact to combat Islamist insurgencies, but it has since expanded its ambitions into the economic sphere. Military rulers in Mali, Burkina Faso, and Niger have pushed for deeper financial and trade integration, including plans to introduce a common biometric passport and other policies to boost internal cooperation.
Under the newly announced trade policy, all imports entering the three countries from ECOWAS nations will be subject to a 0.5% levy, excluding humanitarian aid. The funds generated from the tariff, according to officials, will help finance the operations of the Alliance of Sahel States. However, no specifics have been provided on how the funds will be allocated, raising concerns about transparency and economic sustainability.
Potential Economic Backlash
While the junta governments see the tariff as a means to raise funds for their economic independence, analysts warn that the measure could hurt the very economies it is meant to support.
The three Sahel nations are among the poorest in the world, heavily reliant on trade and imports for essential goods, particularly from coastal ECOWAS states like Nigeria, Ghana, Côte d’Ivoire, and Senegal. People are concerned that besides disrupting the economic objective of the African Continental Free Trade Area (AfCFTA), the new levy could drive up the cost of goods in Mali, Burkina Faso, and Niger, exacerbating inflation and worsening living conditions for their already struggling populations.
Additionally, businesses that rely on importing materials from ECOWAS nations could see their profit margins shrink, potentially leading to job losses and further economic stagnation. The World Bank has previously warned that trade restrictions in West Africa could reduce economic growth, particularly in landlocked nations like Mali and Burkina Faso, which depend on external trade routes.
Impact on Nigeria and Regional Trade
Nigeria, which has long been one of Niger’s top trading partners, is among the countries likely to be affected by this tariff. In 2022, Nigeria exported $290 million worth of goods to Niger, but by 2023, exports had already declined to $209 million, reflecting the strain in economic ties. Major Nigerian exports to Niger include:
- Petroleum Gas ($44.6M)
- Electricity ($41.5M)
- Cement ($32.8M)
The introduction of the 0.5% levy could further discourage Nigerian exporters from trading with Niger, as additional costs may make it less profitable to do business in the region.
Beyond Nigeria, the broader ECOWAS trade network could face disruptions, particularly for Burkina Faso and Mali, which depend on coastal nations for access to seaports. If trade slows down due to the new tax, the supply of crucial goods like food, fuel, and raw materials could be impacted, leading to higher prices and economic hardship for local populations.
Deepening Rift Between ECOWAS and the Military Juntas
The imposition of this tariff is the latest move in the ongoing standoff between ECOWAS and the Alliance of Sahel States. The three countries officially withdrew from ECOWAS earlier this year, citing frustration over what they described as the bloc’s failure to support their fight against Islamist insurgents.
ECOWAS had imposed economic sanctions on these nations following their military coups, hoping to pressure them into returning to democratic rule. However, rather than giving in to the pressure, the juntas have doubled down on their independent political and economic strategies, effectively cementing their breakaway from the regional bloc.
With relations between ECOWAS and the Sahel bloc at an all-time low, experts say the introduction of the levy further reduces the chances of reconciliation. Some observers warn that if the Sahel countries continue down this path, they risk isolating themselves economically, which could worsen their financial and security challenges in the long run.
Uncertain Future for the Alliance of Sahel States
Despite the juntas’ ambitions to create an alternative to ECOWAS, it remains unclear whether the Alliance of Sahel States has the financial and institutional capacity to sustain itself. The economies of Mali, Burkina Faso, and Niger are weak and heavily dependent on foreign aid, and their access to international credit markets has been severely limited since their respective military takeovers.
With the introduction of the 0.5% tariff, the military leaders are betting on trade revenues to keep their governments afloat. However, if economic activity slows down and foreign businesses pull out of the region, the move could ultimately backfire, leaving the countries in a deeper financial crisis.
Analysts say that while the juntas are trying to project economic strength and self-reliance, they may have underestimated the long-term consequences of alienating ECOWAS and imposing additional barriers to trade.
For businesses operating in West Africa, the new levy is a clear sign that the region’s political and economic landscape is shifting rapidly, with growing uncertainty over the future of regional cooperation.