Economic Integration of West African States
The paper intends to define the effects of the regional economic integration of the economic communities of West African States in terms of trade diversion or trade creation. ECOWAS is a trade union among the West African states, which was created in May 1975 to promote trade and regional interaction of these communities. It is made up of 15 states from this region. It has many activities such as enhancing agriculture, controlling external trade, political affairs, health, education and training, among others. The paper focuses on trade to determine whether the body has aided in the creation and diversification of trade (Seka 2009). At the time of creation, many of the West African states had just recently gained independence and there were several negotiations that were taking place upon achieving political independence (Njinkeu, Wilson, Fosso, 2008).
Political affairs affected the formation of this bloc as the states had not fully settled from the colonial period they had experienced from their colonizers. Most of these countries were colonized by the French and British. However, the majority are French colonies. Nigeria being the largest in terms of population and having several resources was the center of the formation of this economic bloc, and it also had some strong political leadership (Seka 2009).
In this research study, it was discovered that states, experienced more bureaucratic processes, suffered greater costs of agricultural exports. However, with the formation of this union, growth in agricultural exports among these countries had improved and the trade has been greatly facilitated due to this economic integration. Nevertheless, there is a strong need for the advocating the implementation of the ECOWAS trade liberalization protocols to achieve better results than this (Njinkeu, Wilson, Fosso 2008).
Economic integration through the formation of a trade bloc was intended to involve all members to participate in free trade and in the long run improve the welfare of the citizens of these member states. However, economic integration cannot be successful without facilities such as transport, communication channels and institutions. Therefore, the member states needed to ensure that these components were available to each of the member countries (Wilson, Mann, Otsuki, 2005). Statistics drawn from records of these member states indicate an increased growth of export and export over the years from the time the bloc was formed. Majorly, food exportation and importation was the main trade commodity as food is important for human existence (Njinkeu, Wilson, Fosso 2008).
ECOWAS has led to the removal of trade blocks and enhanced regional trade with other countries outside the region. The reason is that countries that lacked markets for their goods were able to get them with the assistance of the leaders of this bloc. Communication has been made to ensure that there is comprehensive information on what a country is to produce that would be used as a trade commodity with another country. Trade is enhanced when there are different commodities available among the trading partners and when these partners do not produce the same commodities (Wilson, Mann, Otsuki 2005).
To facilitate trade, there have to be reduction of the transaction costs to ensure that a state gains profit. Cross border trade among the West African states has seen many of the members gain recognition from the external market, and their exports also gained the market. Agriculture was the main sector where many of the ECOWAS members dealing in this bloc enhanced regional distribution of market, which ensured that poverty and food security were taken care of (Seka 2009).
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However, there are several factors that have hindered the thriving of agriculture as the main source of trade in this region: poor infrastructure and farming tools, inadequate resources which are somehow expensive to acquire, and the fact that many of these countries rely on rainfall for planting of the various crops. Numerous farmers also have limited technical knowhow on methods of improved farming strategies. Also, uniform monetary policies and customs, which are different in each of these states, had a negative effect onto the trade of agricultural commodities (Pearson, 2007). Thus, these members had to agree on the policies to use and customs to reduce the production and the exportation of these commodities. ECOWAS has brought about reduction of trade restrictions across the regional borders and enhanced market access (Seka 2009).
Countries that seem to thrive in certain sectors of trade have been able to specialize in these areas with assurance of markets for the commodities. For example, Nigeria has oil deposits and has been able to specialize in this field and supplies oil in this and other international regions. Internal national complex customs have been made easy by this trade bloc, and the movement of goods from the producer to the market was also improved. States that have poor transport, communication and technological facilities have been able to gain access for funds from sources such as the World Bank to provide them with the assistance of the trade bloc (Seka 2009).
Exportation of crops such as coffee, cotton and cocoa has thrived in this region upon formation of the ECOWAS liberalization protocols to govern free movement of goods across the regional borders. Poverty and inequalities among the regional countries have been addressed to ensure that the living style of the citizens is improved. Technological features such as internet access had to be improved to ensure a fast and efficient communication of important information among these countries. Companies and organizations that deal with communication have expanded their geographical span to reach a wide market and the regional states have been able to use one uniform communication method (Pearson 2007).
With the embrace of ICT, there has been improvement in the processing of documents required for exports and imports, which can be readily accessed over the internet. This has been resolved after ICT been massively used and taught in schools in these states. Producers and stakeholders in the trade sector have been educated on the ways of accessing current information and statistics of trade from the internet and embrace modern agricultural methods practiced in other regions and even international countries (Seka 2009).
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Among these third world countries, corruption remains a major problem in the conduction of free trade, and governments of these states have been called upon to put measures and laws that ensure that the perpetrators of injustice and illegal trade are brought to book (Pearson 2007).
ECOWAS has opened market for the regions commodities and greatly contributed to increased foreign direct investment. With the free trade, member states can call for technical advises from thriving partners in the region. Employment opportunities have also arisen as a result of this economic integration. Countries without the necessary knowhow to thrive in certain sectors such as in development and expansion of transport, and communication channels have been able to request the leaders of the trade bloc to source for the experienced ones in foreign countries. As a result, these transport and communication facilities have rose to the current modern standards and led to the success of other non trade related sectors such as education and improved lifestyle (Wilson, Mann, Otsuki, 2005).
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Competition among these West African states have seen the production of efficiency and improved performance in the provision of goods and services. Due to mass production, the production costs have been reduced thus taking care of economies of scale. With production costs made lower, goods and services are affordable to the citizens of these member states and thus improved their living standards. Among them is food which is important for human survival. Starvation due to unaffordable or unavailable food resources have been curbed as countries can with ease import them from those which have specialized in the agricultural sector (Wilson, Mann, Otsuki 2005).
West African governments have integrated and can borrow leadership techniques and styles from their counterparts, which implies improved governance and law making. With this interdependence, there is availability of commodities, and markets for each of the goods are produced. Although ECOWAS has championed the growth and diversification of trade over the decades, its progress has been slow, and thus, there is a need for the union members to call for support from international sources such as the World Bank to fund some of these countries and ensure that there is diversification of exports (Seka 2009). There is a need to expand on the production sector and engage in unexploited areas. Due to the poor technology, some of these states have not exploited their resources and have resources such as minerals probably in unknown parts of their countries (Wilson, Mann, Otsuki 2005).