The ECOWAS Common Investment Market Vision: A Conceptual Preview

Abstract

In 2009 the Economic Community of West African States (ECOWAS) launched a vision to create a Common Investment Market (CIM). The main objective of the CIM is to harmonize investment codes of all ECOWAS member states in order to boost factor movement and, ultimately, promote trade and investments. However, more than a decade after the launch, the CIM vision is yet to materialize. This paper discusses the progress that has been made so far and the inhibitions that have slowed the process. The trend of the analysis shows that even though the region has successfully created a free trade area (with the implementation of the ECOWAS Trade Liberalization Scheme) and a customs union (with the implementation of the Common External Tariff), some of the countries still operate national investment laws that are hugely at variance with some critical protocols of the Community. A typical example includes the fact that the three biggest economies, Nigeria, Ghana and Cote d’Ivoire continue to implement rules that are inimical to trade and investment. This is to the extent that whilst Nigeria maintains a “prohibition list” that bans the importation of certain category of goods, Ghana operates an investment regime which requires all foreigners (including ECOWAS nationals) to bring in a minimum capital of $1,000,000 before they can trade in the country’s retail sector. Meanwhile, Cote d’Ivoire’s national investment laws also create “exceptions” that are no-go-areas for foreigners, including ECOWAS nationals. The paper concludes with some recommendations based on a conceptualization of how the CIM can be attained through the formulation of policy frameworks, promotion of free movement of persons and goods; development of infrastructural networks, integration of financial systems, participation of the private sector and the attraction of Foreign Direct Investments (FDI) into the region.

Appendices

Appendix 1

Box 1: Article 2 of 1975 ECOWAS Original Treaty: Aims of the Community

Clause 2 of Article 2 states that: the Community shall by stages ensure:

• i. the elimination as between the Member States of customs duties and other charges of equivalent effect in respect of the importation and exportation of goods;

• ii. the abolition of quantitative and administrative restrictions on trade among the Member States;

• iii. the establishment of a common customs tariff and a common commercial policy towards third countries;

• iv. the abolition as between the Member States of the obstacles to the free movement of persons, services and capital;

• v. the harmonisation of the agricultural policies and the promotion of common projects in the Member States notably in the fields of marketing, research and agro-industrial enterprises;

• vi. the implementation of schemes for the joint development of transport, communication, energy and other infrastructural facilities as well as the evolution of a common policy in these fields;

• vii. the harmonisation of the economic and industrial policies of the Member States and the elimination of disparities in the level of development of Member States;

• viii. the harmonisation, required for the proper functioning of the Community, of the monetary policies of the Member States;

• ix. the establishment of a Fund for Co-operation, Compensation and Development; and

• x. such other activities calculated to further the aims of the Community as the Member States may from time to time undertake in common (p. 20).¹

Source ECOWAS Treaty (1975).

Appendix 2

Box 2: Nigeria’s Import Prohibition List

• 1. Live or dead birds including frozen poultry—HS codes 0105.1100–0105.9900, 0106.3100–0106.3900, 0207.1100–0207.3600 and 0210.9900.

• 2. Pork, beef—HS codes 0201.1000–0204.5000, 0206.1000–0206.9000, 0210.1000–0210.2000.

• 3. Birds eggs—HS code 0407.0000; excluding hatching eggs.

• 4. Refined vegetable oils and fats—HS code 1507.1000.00–1516.2000.29 [but excluding refined Linseed, Castor and Olive oils. Crude vegetable oil are however NOT banned from importation].

• 5. Cane or beet sugar and chemically pure sucrose, in solid form containing added flavouring or colouring matter—HS code 1701.91.1000–1701.99.9000 in retail packs.

• 6. Cocoa butter, powder and cakes—HS codes 1802.00.0000–1803.20000, 1805.001000–1805.00.9000, 1806.10.0000–1806.20.0000 and 1804.00.0000.

• 7. Spaghetti/noodles—HS codes 1902.1100–1902.30.0000.

• 8. Fruit juice in retail packs—HS codes 2009.11.0012–2009.11.0013–2009.9000.99.

• 9. Waters, including mineral waters and aerated waters containing added sugar or sweetening matter or flavoured, ice snow—HS codes 2201.1000–2201.90.00, other non-alcoholic beverages HS code 2202.10.00–2202.9000.99 [but excluding energy or health drinks {liquid dietary supplements} e.g. Power Horse, Red Ginseng etc.] HS code 2202.9000.91 and beer and stout (bottled, canned or otherwise packed) HS code 2203.0010.00–2203.0090.00.

• 10. Bagged cement—HS code 2523.2900.22.

• 11. Medicaments falling under headings 3003 and 3004 as indicated below:

  • Paracetamol tablets and syrups.

  • Cotrimoxazole tablets syrups.

  • Metronidazole tablets and syrups.

  • Chloroquine tablets and syrups.

  • Haematinic formulations; ferrous sulphate and ferrous gluconate tablets, folic acid tablets, vitamin B complex tablet [except modified released formulations].

  • Multivitamin tablets, capsules and syrups [except special formulations].

  • Aspirin tablets [except modified released formulation and soluble aspirin].

  • Magnesium trisilicate tablets and suspensions.

  • Piperazine tablets and syrups.

  • Levamisole tablets and syrups.

  • Clotrimazole cream.

  • Ointments—penicillin/gentamycin.

  • Pyrantel pamoate tablets and syrups.

  • Intravenous fluids [dextrose, normal saline, etc.].

• 12. Waste pharmaceuticals—HS code 3006.9200.

• 13. Mineral or chemical fertilisers containing two or three of the fertilising elements nitrogen, phosphorus and potassium (NPK 15-15-15), excluding organic fertiliser HS code 3105.10.00.00–3105.90.00.00.

• 14. Soaps and detergents—HS code 3401.11.1000–3402.90.0000 (in retail packs only).

• 15. Mosquito repellant coils—HS code 3808.9110.91 (mosquito coils).

• 16. Rethreaded and used pneumatic tyres but excluding used trucks tyres for rethreading of sized 11.00 × 20 and above 4012.2010.00.

• 17. Corrugated paper and paper boards—HS code 4808.1000, and cartons, boxes and cases made from corrugated paper and paper boards HS code 4819.1000, toilet paper, cleaning or facial tissue—HS code 4818.1000–4818.9000 excluding baby diapers and incontinence pads for adult use 4818.4000.41 and exercise books—HS code 4820.2000.

• 18. Telephone re-charge cards and vouchers—HS code 4911.9990.91.

• 19. Carpets and other textile floor coverings falling under HS code 5701.10.000–5705.00.0000.

• 20. All types of foot wears, bags and suitcases HS codes 6401.1000.11–6405.9000.99 and 4202.1100.10–4202.9900.99 [but excluding safety shoes used in oil industries, sports shoes, canvas shoes all completely knocked down (CKD) blanks and parts].

• 21. Hollow Glass Bottles of a capacity exceeding 150 ml (0.15 l) of all kinds used for packaging of beverages by breweries and other beverage and drink companies—HS code 7010.9021.29 and 7010.9031.00.

• 22. Used compressors—HS code 8414.3000, used air conditioners—HS codes 8415.1000.11–8415.9000.99 and used fridges/freezers—HS codes 8418.1000.11–8418.69.0000.

• 23. Used motor vehicles above fifteen (15) years from the year of manufacture—HS codes 8703.10.00–8703.90.0000.

• 24. Ball point pens and parts including refills (excluding tip) HS code 9608.10.0000.

• 25. Tomato paste or concentrate put up for retail sale—2002100000, 2002902000, 200290900.0

Source Nigeria Customs Service (2019).²