A new 0.5% levy has been introduced by the West African Juntas, Mali, Burkina Faso, and Niger, on goods imported the from Economic Community of West African States (ECOWAS) nations, including Nigeria.
This new policy, which takes effect immediately, aims to generate funds for their recently established three-nation union after breaking away from ECOWAS.
These three countries, all led by military governments that took power through coups, formed the Alliance of Sahel States in 2023 as a security pact.
Over time, this alliance has developed into a broader economic union with plans to strengthen military and economic ties, including the introduction of biometric passports.
The new levy applies to all goods imported from outside the three countries, except for humanitarian aid.
Officials stated that the revenue will be used to “finance the activities” of the alliance but did not specify further details.
Trade relations between Niger and Nigeria highlight the potential effects of this policy.
In 2022, Niger imported $290 million worth of goods from Nigeria, making Nigeria one of its top five trading partners, according to data from the World Integrated Trade Solution.
That same year, Niger exported $68 million in goods to Nigeria.
By 2023, Nigeria’s exports to Niger dropped to $209 million, with key products including petroleum gas ($44.6 million), electricity ($41.5 million), and cement ($32.8 million), based on data from the Observatory of Economic Complexity.
This decision effectively ends decades of free trade among ECOWAS member states and further widens the divide between the Alliance of Sahel States and democratic countries like Nigeria and Ghana.
The departure from ECOWAS last year came after the three juntas accused the regional bloc of failing to provide adequate support in their fight against Islamist insurgencies and internal security challenges.
Economic sanctions imposed by ECOWAS on these countries to push for a return to democratic rule have not yielded much success.
Instead, the juntas have doubled down on efforts to build independent political and economic structures.
These three nations remain among the poorest in the world, struggling with ongoing violence linked to Islamist insurgencies associated with al-Qaeda and the Islamic State.
Over the past decade, these conflicts have led to thousands of deaths, displaced millions of people, and eroded public trust in elected governments that failed to restore peace.
Observers believe this new levy could significantly impact trade in West Africa, especially for Nigeria, whose economy is deeply connected to its neighbors.
The move also raises questions about ECOWAS’s future, as internal divisions continue to test the bloc’s unity and effectiveness.
Businesses operating across West Africa may need to adjust their strategies as political and economic alliances shift.
It remains to be seen how the Alliance of Sahel States will navigate the financial and security challenges that led to their exit from ECOWAS in the first place.
