Analysis of the trade potential of ECOWAS countries

Abstract

This paper analyzes the trade potential of ECOWAS countries following the adoption of the ECOWAS common external tariff. Our study relies on a structural gravity model, estimated using the Poisson pseudo-maximum likelihood (PPML) method, applied to panel data constructed from a sample of 63 countries over the period 2000-2020. Our findings reveal, on the one hand, that factors such as distance, contiguity, common language, shared colonial history, and membership in a regional integration area have a significant influence on bilateral exports. On the other hand, it appears that the export potential within ECOWAS is far from being fully exploited, particularly for countries such as Guinea, Nigeria, Benin, Côte d'Ivoire, and Ghana. This gap suggests the existence of persistent non-tariff barriers that hinder intra-regional trade. To stimulate trade, it is crucial to strengthen regional cooperation in terms of trade facilitation and the implementation of harmonized trade policies.

Keywords: Trade potential, intra-ECOWAS trade, gravity model, trade intensity, regional trade agreement

JEL Classification : F13, F14, F15, F53

Paper type : Empirical research