THE SHARING OF COSTS AND BENEFITS OF REGIONAL ECONOMIC INTEGRATION IN THE ECONOMIC COMMUNITY OF WEST AFRICAN STATES (ECOWAS)

Abstract

The objective of this paper was to compare the distributions of costs and benefits of economic integration in the Economic Community of West African States (ECOWAS). In other words, it sought to evaluate whether the distribution of benefits corresponded to the distribution of costs among the member states of ECOWAS over the study period, 1975-2014. The cost of interest in this study was the contribution of each member state to the budget of ECOWAS while the benefit of interest was the level of intra-ECOWAS exports of each member state. To facilitate the evaluation, the distribution of percentages of member states’ contribution to budgetary revenues were calculated and tabulated. Similarly, the ratios of intra-ECOWAS exports to GDP and total exports of member states were calculated and tabulated. The findings revealed that (i) Nigeria accounted for 77-82 per cent of ECOWAS budgets, followed by Cote d’Ivoire with 4-4.6 per cent, Ghana with 3-6.3 per cent and Senegal with about 2.0 per cent; (ii) in terms of the distribution of the ratio of intra-ECOWAS exports to total exports of member states, Nigeria’s performance was 4.4 per cent as against Cote d’Ivoire’s 28.2 per cent, Ghana’s 6.6 per cent, Guinea’s 26.8 per cent, Niger’s 22.7 per cent and Senegal’s 20.3 per cent; (iii) overall, the distribution of benefits was not consistent with the distribution of costs of integration; and (iv) responsible for the non-correspondence between the distributions of costs and benefits of integration was the adoption of a common currency by the members of the West African Economic and Monetary Union (WAEMU). It was recommended that the sources of fund be increased and the same percentage coefficient of contribution be adopted for all member states to make for equity and continued existence of ECOWAS. Differences in member states’ contributions to ECOWAS budgets should come from differences in the tax base.