The plan by Burkino Faso, Mali and Niger to withdraw from the west African economic and political grouping Ecowas might well have sent a shiver down the spines of geopolitical analysts. It seems to represent another victory for Russia and a further blow to France and the regional hegemon Nigeria.
To an economist though, this looks like the silliest own goal since Brexit, so let’s call these three countries the Afrexiteers.
Ecowas is (until the three depart after a 12-month notice period) a 15-member state grouping with a combined GDP of $702 billion in 2023.
The Afrexiteers account for just $58 billion or 8% of this. Their combined GDP is about two thirds the size of Luxembourg’s. Their departure is not a great loss to those who remain, especially as their per-capita GDP is less than $1,000.
But losing the easy, tariff-free access built up since Ecowas was founded in 1975 will be a blow to the Afrexiteers. As with Brexit, trade will still get done, just more expensively and more slowly. This hurts populations that can least afford it. Leaving Ecowas will also hurt any efforts to attract more foreign direct investment.
Will it show up as a hit to GDP growth? Given the paucity of data, and the sluggishness with which it’s released, it will be hard to see for a while. GDP growth can be extremely volatile in tiny economies, but if we estimate that hurting trade might take half a percentage point off per-capita GDP growth, and when this only averaged 0.8% in Mali over the past 20 years, or 1.8% in Niger or 2.4% in Burkina Faso, that is a hit no population should have to endure.
Perhaps more important though is the signal this sends about the military juntas in these three countries. Leaving Ecowas suggests that they still see their primary problem as external and not internal.
This core belief is of course why they came to power supported by crowds in their capital cities. Overthrowing leaders “backed by France” was seen as a blow to colonial style arrangements that the coup leaders, or at least many of their supporters across Africa, blame for the poverty that wracks the Sahel region.
Yet it has been more than a typical lifetime (of 60-64 years) in the Afrexiteer countries since they became independent in 1960. Over three generations, the adult literacy rate has only been raised to 31-41% and this is too low for good, sustainable per-capita GDP growth.
The education record is about the worst performance in the world and far worse than other former French colonies in north Africa, or indeed in Ecowas. Meanwhile fertility rates have been extremely high. In fact, Niger’s is the highest in the world. Huge growth of a mostly non-educated workforce is why the Afrexiteers have not, and cannot escape poverty.
It is also why I warned US Africa Command in 2018 that the Sahel would remain a region of coups, terrorism and instability for at least the next 10-20 years. They had called in Africa experts to help guide them on future policy, and the message from this Time Travelling Economist was that, given literacy and fertility rates like Afghanistan, they should expect problems like they’d seen in Afghanistan. Sadly, one of the few presidents in the region who was intent on changing that story—with a strong focus on female education—was deposed in Niger’s most recent coup.
For global markets, these three countries are becoming as irrelevant as Afghanistan. For the rest of Ecowas, they are an irritation. For the world, they are becoming an unfortunate lesson in policy making, and a clear illustration of the futility of the blame-game. Again, a little like Brexit. But unlike Brexit, this hurts the poorest in the world.