The ECOWAS free trade area: An ex ante and ex post analysis ofthe impact on Nigeria’s imports

Oluwadamilola Oluwusi & Cecilia Punt*

A partial equilibrium model was used to estimate the impact of a free trade agreement within ECOWAS on imports by Nigeria, based on trade data prior to implementation in 2015. Estimated trade creation for agro-processed goods was just more than double that for agricultural products, which may point towards increased competition for domestic value-added industries that are targeted for support by Nigeria’s industrial policy for diversification. The welfare gains for Nigeria are positive, despite the tariff revenue loss. The results of the model are upper-bound estimates because Nigeria still applies non-tariff barriers. When comparing the model results with actual trade trends since 2015, it is found that the increase in trade indeed takes place in the year after the implementation of the zero rating, but this increase in intra-ECOWAS trade is not maintained. In subsequent years, the trade levels appear to revert to pre-agreement levels.