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ECOWAS Keeps Free Trade Zone with AES Members “until further notice”

ECOWAS Keeps Free Trade Zone with AES Members “until further notice”
Wednesday, 29 January 2025 12:43

By late 2024, the AES had already committed to maintaining free movement with ECOWAS. Following their official withdrawal on January 29, 2025, all eyes are now on how relations between the two blocs will unfold. Investors are closely watching the situation, as key discussions are expected to outline the future of their cooperation.

The Economic Community of West African States (ECOWAS) announced on January 29 it will maintain a free trade zone with the members of the Alliance of Sahel States (AES) Burkina Faso, Mali, and Niger “until further notice.” This decision follows the official exit of these three Sahelian countries from the regional organization, a result of growing tensions after ECOWAS imposed sanctions in response to military coups.

Indeed, despite their exit, the citizens of Burkina Faso, Mali, and Niger will continue to enjoy the right to free movement, residence, and establishment without a visa within ECOWAS countries. Passports and national identity cards bearing the ECOWAS logo will remain valid. Moreover, goods and services from AES member countries will still benefit from the provisions of the ECOWAS Trade Liberalization Scheme (ETLS) and the ECOWAS Investment Policy.

This temporary measure aims to prevent a sudden rupture in economic and social relations. ECOWAS clarified that these arrangements will remain in place “until the Conference of Heads of State and Government adopts comprehensive measures for future relations with these three countries.” A dialog structure has been set up to discuss these terms.

The announcement comes after the AES declared in December 2024 that it would not impose visas on ECOWAS citizens, while reserving the right to refuse entry to “inadmissible immigrants.” Moreover, the three Sahelian countries introduced new passports, designed with their alliance’s colors, on January 29.

Despite diplomatic tensions, some ECOWAS member states, such as Ghana and Benin, have expressed a desire to continue cooperating with the AES. Ghana, for instance, appointed a special envoy, while Benin continues to call for collaboration despite its disagreements with Niger.

Beyond the free movement of goods and people, the departure of the three Sahelian countries raises concerns about investments and capital flows between the two blocs. As of now, Burkina Faso, Mali, and Niger together hold 6.29% of the capital in the ECOWAS Bank for Investment and Development (EBID), which had invested $4.17 billion in the region by the end of 2023.

Though their shares are modest compared to countries like Nigeria (31.2%), Ghana (15.71%), or Côte d’Ivoire (14.76%), these three countries have received significant funding from EBID for major projects. This includes the construction of the Samendeni Dam and hydroelectric plant, as well as the new Donsin airport in Burkina Faso, supported by a CFA5 billion loan (almost $8 million in 2013). In Mali, EBID contributed to the Taoussa Dam project, while in Niger, it helped finance the Kandadji Dam. However, their exit from ECOWAS could lead to a reorganization of the bank’s capital and a shift in its investment priorities.

To address this gap, AES members have announced plans to launch their own investment bank to finance joint projects and mitigate their exclusion from the regional financial mechanisms.

While the decision to maintain the free trade zone reassures private investors benefiting from ECOWAS’s guarantees for the free movement of goods and services, this measure is only temporary. The focus within the ECOWAS business community now turns to upcoming ministerial meetings and summits of Heads of State. These will set the course for future economic and political relations with the three former members. The organization, now reduced to 12 countries, will also have to adjust to this new configuration.

Writing by Moutiou Adjibi Nourou; editing by Vahid Codjia; translation from French by Firmine AIZAN

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