25/03/2026
𝑨𝒏 𝑰𝒏𝒗𝒆𝒔𝒕𝒊𝒈𝒂𝒕𝒊𝒐𝒏 𝒐𝒇 𝑬𝒄𝒐𝒏𝒐𝒎𝒊𝒄 𝑰𝒎𝒑𝒍𝒊𝒄𝒂𝒕𝒊𝒐𝒏𝒔 𝒐𝒇 𝑾𝒊𝒕𝒉𝒅𝒓𝒂𝒘𝒂𝒍 𝒐𝒇 𝑨𝒍𝒍𝒊𝒂𝒏𝒄𝒆 𝒐𝒇 𝑺𝒂𝒉𝒆𝒍 𝑺𝒕𝒂𝒕𝒆𝒔 (𝑨𝑬𝑺) 𝑭𝒓𝒐𝒎 𝑬𝑪𝑶𝑾𝑨𝑺
This paper investigates the potential economic implications of the withdrawal of Sahelian countries (Burkina Faso, Mali, and Niger), called the Alliance of Sahel States (AES), from the Economic Commission for West African States (ECOWAS). Specifically, the paper investigates the potential impact of the AES withdrawal on trade flows (exports and imports), economic growth, migrants' remittances, and tax revenue in the Sahel States and the ECOWAS. An impulse response function (IRF) analysis, inspired by Bernanke et al., is applied using a Factor-Augmented Vector Autoregressive (FAVAR) model, with annual data from 1980 to 2022. We find that a shock to ECOWAS intra-community total import would lead to a marginal decline in the tax revenue of Burkina Faso and Mali. Counterintuitively, a shock to ECOWAS intra-community exports would increase Mali's exports to the rest of ECOWAS. Moreover, trade diversion effects arising from the exit of the AES countries could increase exports for ECOWAS's three lead economies (Côte d'Ivoire, Ghana, and Nigeria). In this regard, AES countries should leverage the existing favorable trade dynamism with their respective neighboring countries (Cote d'Ivoire, Ghana, Senegal, Nigeria) through the development of bilateral cooperation initiatives and strengthen trade cooperation among them.
𝑩𝒚 𝑴𝒂𝒎𝒐𝒖𝒅𝒐𝒖 𝑺𝒆𝒃𝒆𝒈𝒐, 𝑰𝒅𝒓𝒊𝒔𝒔𝒂 𝑴. 𝑶𝒖𝒆𝒅𝒓𝒂𝒐𝒈𝒐, 𝑨𝒃𝒊𝒐𝒅𝒖𝒏 𝑶. 𝑭𝒐𝒍𝒂𝒘𝒆𝒘𝒐, 𝒊𝒏 𝑨𝒇𝒓𝒊𝒄𝒂𝒏 𝑫𝒆𝒗𝒆𝒍𝒐𝒑𝒎𝒆𝒏𝒕 𝑹𝒆𝒗𝒊𝒆𝒘
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