West African development bank expects regional growth to edge lower

ECOWAS Bank for Investment and Development, EBID has said that economic growth in the 15 member states is likely to inch down to 5.0 per cent this year from 5.1 per cent last year. EBID, linked the decline to U.S. tariffs as well as duties being imposed in Africa following the decision of three of its members to set up a rival alliance. “We believe that the sub-region could have performed much better than the projection we are giving it. However, there are implications for issues like the trade war and also the departure of the three countries in overall GDP growth,” said Joseph Asenso, head of EBID’s macroeconomic research.
ECOWAS members Burkina Faso, Mali and Niger started a rival Alliance of Sahel States bloc last year to stave off the risk of military intervention by ECOWAS after military juntas seized power in the three states in a series of coups in 2020-2023. The new bloc has imposed taxes on goods exported from the rest of ECOWAS. If the larger bloc retaliates in line with its rules on reciprocal duties, trade, which has already been retreating, will shrink further, Asenso said. Other risks to the outlook include potentially reduced remittances from citizens of the bloc living in the United States due to the rising cost of sending money across borders after the U.S. increased taxes, Asenso said. Sustained pressure on the cost of goods and services could also lead to higher inflation and interest rates, curbing economic growth, he said.