The Study Of ECOWWAS Cross Border Trade

This thesis is about the economic relations that exist between states in West Africa and how this relationship reflects in their individual economic advancement. This research will attempt to analyze the impact the regional economic block in West Africa: The Economic Community of West African States (ECOWAS) has had on the growth of the economy of its members by using the case of Ghana, one of its member states between 1999 and 2005. During this period. Ghana's economy experienced sustained continuous growth level with a focus on industrialization and foreign direct investment.The research does an analysis of the various protocols (treaties or agreements) of the regional body like the Free Movement of Persons, Right to Residence and Establishment and the ECOWAS Trade Liberalization protocols that seek to promote intra regional investment. This is done side by side with the levels and nature of trade that has gone on between Ghana and the other members of ECOWAS so as to see how the regional body impacted the on the economy of Ghana during the period.At the end of this research, the realization is that, in as much concrete efforts have been made in the line of cross border investments and trade, what has gone on between Ghana and the rest of West Africa can best be described as negligible but rather it is countries outside the ECOWAS framework that have aided the growth of the Ghanaian economy during the period. The recommendation is that, to sustain and develop the country's economy into an industrial one like envisaged, Ghana needs to look to other countries that have the technical and financial base that will allow for investments in industry and manufacturing.This thesis is divided into five chapters.Chapter One-Introduction:This chapter introduces the subject matter of the entire thesis. It creates an understanding of the global system as it is today and how it has drifted from a system where states saw themselves as being on their own and how their actions presently are advised by their closeness to each other by the gradual removal of barriers between them and encouraging closer economic, political and social interaction.After years of unstable governance, the Ghanaian economy was for a long period stagnant and even after the return to democracy in 1993. It was not until 1995 that signs of growth were experienced in the economy. Between 1999 and 2005, Ghana experienced its highest levels of growth. The economy grew year on year due to a combination of favorable government policies and peaceful political climate. The government policies a few years earlier were to introduce a tax holiday system for investments aimed at manufacturing and industry. These policies took time to massage the performance of the economy.Chapter by chapter categorization also forms a part of this introductory chapter.Chapter Two- Literature Review and Theoretical Framework:This chapter is divided into two sections. The first part reviews various scholarly literatures written on the relationship between West African states through the framework of the Economic Community of West African States (ECOWAS) and the second part analyzes the reasons for the creation and sustenance of the organization from a theoretical perspective.In examining the history and importance of regional integration, relevant scholarly works are reviewed in this part of the work. The Economic Community of West African States as a regional economic body has over the years played a pivotal role in the economic advancement of the sub-region and this is looked at in this part of the work. In doing this. I looked at the aims of the body and what the reasons behind its formation in 1975 were. Arguments as to its usefulness in the current global sphere of globalization are also critically analyzed.Literature from African scholars, particularly West Africans who have had firsthand experience of the workings and role played by ECOWAS are cited. As an economic body, I also look at the levels of economic activity facilitated between West African States under the auspices of the regional body with a particular bias towards Ghana. Policy initiatives are cited and their impact assessed in this section of the work.The second part of this first chapter uses International Relations theories to create an understanding in the relationship between West Africans and how this relationship has motivated their continues membership of the group.I use the theory of Economic Liberalism which is a derivation of the classical theory of liberalism to advance the creation of an open market in the West African region which encourages the private sector to enter and also enter into partnerships with the public sector. With the aim of economic advancement. ECOWAS has managed to bring together several economies and has created a "borderless regional economy" open to everyone within it. States like Ghana have benefited from this union in several ways.The theory of Cooperation is also used to explain the adjustment in the behavior of states in response to the demands of the body they belong to. This also clearly explains the situation that led to membership of ECOWAS by Ghana. The problems of the world and states go beyond finding internal political solutions by nations but rather solutions from a broader array of other sources. This theory creates an understanding with regard to the trade relations between Ghana. ECOWAS and the rest of the world. Cooperation serves as a guarantee for peace and friendly relations between states. It is assumed, with the creation of economic interdependence, it will impracticable for states to resort to wars to resolve their differences. They would have too much to lose financially and in terms of their time and commitment.The Functionalism theory is another IR theory used to integration in the West African sub-region. In West Africa, state-state relations especially in the area of the trade has been largely been stable due to the formation of linkages, when it comes trade, an ever rising level of transactions and interactions including capital movement, communication and exchange of people and ideas between the member states of ECOWAS and with their collective involvement in dealing with external actors, the entire region has a stronger voice in the world system. Ghana has particularly been at the receiving of a lot of the capital from private business people in the region especially due to its relatively predictable political and economic environment.Chapter Three-Historical Background of the Economic Community of West African States and Ghana-This chapter delves into the history behind the formation of ECOWAS and how it came into been. It draws a link between the conditions that prevailed at the time West African states became independent and why the leaders at the time decided to create a body that will link the economies of the region.The chapter also captures the history of Ghana. It traces Ghana's political, economic and social background to create an understanding of the current conditions that prevail in the country. It looks at Ghana right from 1957 till present and draws a link between its current economic vision of industrialization and the policies of ECOWAS. The final part of the chapter takes a look at the contribution Ghana has made to ECOWAS over the years it has been a member. It examines the projects entered into by Ghana together with other West African States who also members of ECOWAS under the auspices of the Economic Community of West States to improve the economic standing of the region.Chapter Four-Cross Border Trade in West Africa:These chapters looked at the policies initiated by West African states as a group, to aid and facilitate the cross border movement of citizens in the region. The chapter looks at the community's protocol that allows citizens to move freely across borders in the region without any hindrance or stringent demands made on them by the second countries. An assessment is also done on the benefits Ghana has derived from this initiative economically.This is done by examining the levels of trade over the period under review between Ghana and the other partners in the West African region. It takes a look at Ghana's GDP growth over the period and relates it to the countries trade with other countries especially West African states. With a predominately export demand dependent economy, the chapter makes an assessment of Ghana's export and import figures to ascertain if the West African community has contributed to the growth experienced by Ghana within the period.Chapter Five-Finds and Prospects:Chapter four is a summary of the entire thesis and also puts out the finds of the research. It also makes recommendations on how Ghana as an independent state would maximize its gains both within the frameworks of the regional body and out of it in a manner that will be beneficial to all the other members of the West African region.It encourages Ghana to instead of just looking to its immediate environs for investments as advocated by ECOWAS; the country should look to other regions and countries for investments that will match its economic vision of creating an industrial economy. It recommends that Ghana should look to attracting investments from places like China and other already industrialized to establish the industrial base it is looking to. This chapter also admonishes ECOWAS to encourage its members to move away from being just producers of primary products but rather turn to value addition, manufacture and industry.