West Africa’s ‘Brexit’ moment

Burkina Faso, Mali and Niger plan to leave ECOWAS. Exiting the regional bloc puts them at the peril of losing access to a substantial $702bn market.

Author

Anthony Miclet
February 06, 2024

Good morning. Senegalese president Macky Sall has postponed a presidential election initially scheduled for Feb 25, sparking criticism and concerns of an "institutional coup".

That marks a setback for a nation considered one of the most stable democracies in West Africa and comes shortly after military-led Mali, Burkina Faso, and Niger quit regional bloc ECOWAS.

In other top stories from the past week:

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With the West African nation boasting one of the continent’s and the world’s fastest-growing economies, investors in our community are excited about the opportunity!

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Rally in DangCem, Orange CI lead West African markets

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Bitcoin closed last week in the green but struggled to hold above $43,000 on Monday as United States Federal Reserve Chair Jerome Powell pushed back on market expectations for interest rate cuts in the next few months. 

Oil prices rose Monday after the US launched retaliatory strikes in Iraq and Syria against Iranian forces and their allies over the weekend, raising the risk that the Middle East is heading toward a broader conflict.

Italian interest

European nation unveils $6bn plan to boost Africa relations

Italy’s government revealed a nearly $6bn plan to support Africa during a one-day Italy-Africa summit in Rome, which had AfDB President Akinwumi Adesina present, along with 25 African leaders and EU officials.

The plan includes initiatives such as constructing a training center on renewable energy in Morocco, education projects in Tunisia, and other initiatives in Algeria, Mozambique, Egypt, Congo Republic, Ethiopia, and Kenya.

For Italy, potential benefits include a reduction in irregular migration from African nations and assistance in mitigating Europe's (particularly Italy's) reliance on Russian oil.

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Despite sluggish economic growth and lingering inflation, Africa’s gaming market remains buoyant. That’s according to research by Newzoo, which expects revenues in the industry to reach $1bn for the first time this year.

Gamers in sub-Saharan Africa increased to 186m in 2021 from 77m in 2015, with 95% of the market on mobile phones, reflecting the continent’s improved internet access and affordable smartphones.

In 2022, games sold in the region generated $862.8m in revenue, up 8.7% year over year. That’s in defiance of a broader contraction, with the global games market declining 4.3% in 2022 to $182.9bn.

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AFCON Roundup

The semi-finals of the 2023 CAF Africa Cup of Nations are set. Image credit: Fabrizio Romano/Twitter

The Semi-Finals are set: Two of Africa’s greatest footballing nations will go head to head on Wednesday (February 7) to battle it out for a place in the final of the 2023 Africa Cup of Nations.

The Super Eagles have seen off fierce competition in the shape of Angola and Cameroon, whilst Bafana Bafana defeated Morocco and Cape Verde to reach the semi-finals.

In the other tie, host nation Cote d’Ivoire went through to the semi-finals after winning Mali on Saturday night. The Ivorians will battle DR Congo who defeated Guinea 3-1 on Friday.

Follow Daba’s coverage of every game on our Instagram & X (Twitter) pages!

Our insight for the week

Get more context into events shaping Africa’s economic landscape.

West Africa’s ‘Brexit’ moment could prove costly: The intentions of Mali, Niger, and Burkina Faso to quit ECOWAS could have detrimental effects on their fragile economies and worsen existing issues of widespread food insecurity.

The countries, currently under military rule, a week ago announced plans to withdraw from the Economic Community of West African States (ECOWAS) citing dissatisfaction with sanctions imposed in response to recent coups in their respective countries.

The departure, if or when finalized, would mark a rupture in the longstanding relationship between the junta-led West African states and the regional economic community.

But more importantly, the economic impact could be severe. 

The landlocked nations, among the poorest in the region with an annual per-capita GDP of less than $1,000, face potential risks by breaking away from the West African bloc, per a report by Bloomberg.

Particularly, exiting ECOWAS puts them at the peril of losing access to a substantial $702bn market, exposing them to elevated tariffs and restrictions on the movement of goods and financial flows. 

This move has the potential to exacerbate economic challenges and compound existing vulnerabilities, further threatening the stability of these nations.

We will be publishing a deeper piece analyzing what’s at stake later this week.

Watch out for the blog on our website.

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