## Trade Integration in the WAEMU: Goals, Implementation, and Remaining Challenges

## Source details

**Canonical URL:** [Trade Integration in the WAEMU: Goals, Implementation, and Remaining Challenges](https://www.imf.org/-/media/files/publications/selected-issues-papers/2025/english/sipea2025071.pdf)

## Other formats

- [Markdown version](/-/media/files/publications/selected-issues-papers/2025/english/sipea2025071.pdf.md)
- [Structured JSON version](/-/media/files/publications/selected-issues-papers/2025/english/sipea2025071.pdf.json)

---

### A. Introduction
- Trade integration promotes efficiency, economies of scale, structural transformation, innovation, productivity, and attracts foreign direct investment.
- The African Continental Free Trade Area (AfCFTA) aims to:
  - Expand intra-African trade in goods and services by progressively eliminating tariffs and non-tariff measures.
  - Improve the trade environment by simplifying and harmonizing customs regulations and border processes.
  - Harmonize regulations for goods and services provision, investment regimes, intellectual property rights, competition, and digital trade, with the eventual objective of a single continental market.

### B. Trade performance and structure in the WAEMU
- Trade openness and intra-regional trade:
  - WAEMU trade openness (exports plus imports as a share of GDP) rose from 48 to 52 percent over 2000-19.
  - On average, WAEMU members’ exports to other African countries (including WAEMU members) accounted for only one-quarter of WAEMU countries’ exports in 2019.
  - By comparison, the EU records 60 percent of trade among member countries.
- Global value chain (GVC) integration:
  - GVC integration within WAEMU is approximately half that of the European Union (EU) and one-twentieth that of the former NAFTA countries.
  - Backward and forward linkages remain underdeveloped within the region and with the global economy.
  - Trade agreements account for 40 percent of the GVC integration differences between African nations and comparators.
- Export composition and diversification:
  - Exports beyond Africa are dominated by fuel and primary goods.
  - The proportion of processed goods in WAEMU members’ exports to the rest of the world is 43 percent, compared with 60 percent in ASEAN.
  - Exports to African countries show moderately greater diversification, indicating potential diversification opportunities from deeper intra-African trade (noting caveat about possible reexports).
- Data caveat:
  - Significant informal trade is not captured in statistics; informal flows could account for as much as 30-50 percent of intraregional trade in estimates cited.

### C. Trade policy-related obstacles
- Tariffs:
  - Through the ECOWAS CET, WAEMU members impose tariffs averaging 9-10 percent on goods coming from outside ECOWAS.
  - WAEMU members’ exports to countries outside ECOWAS face tariffs of 9-10 percent as well.
- Non-tariff measures (NTMs):
  - NTMs are government regulations other than tariffs (including sanitary and phytosanitary measures and technical barriers to trade, TBTs).
  - NTMs between WAEMU countries and other African countries hinder trade by as much as tariffs of 15 percent would.
  - Across African countries more generally, NTMs are equivalent to an import tariff of 18 percent on average.
  - NTMs hamper trade even among WAEMU countries; NTMs are estimated to hinder trade among WAEMU members by as much as import tariffs of 17 percent would.
  - Country-specific NTM levels within WAEMU: Senegal and Cote d’Ivoire at 10 percent; Mali at 27 percent.
- Trade environment constraints:
  - Limited transport infrastructure and cumbersome customs and border processes weigh on trade, including intra-WAEMU trade.
  - The WAEMU trade integration agreement does not cover several important areas affecting trade, including harmonization of sanitary, phytosanitary, and technical regulations, and does not extend to streamlining and harmonizing customs and border processes.

### D. Institutional goals and remaining gaps (Box summary)
- Goals and institutional measures:
  - WAEMU aims to create free trade and eventually a single market based on common trade policies and the “four freedoms” (free movement of goods, services, capital, and labor; Article 4 of the WAEMU Treaty as revised in 2003).
  - A customs union began in 2004 with a common external tariff (CET) and tariff-free trade among members.
  - In 2015 ECOWAS adopted a CET; WAEMU countries adopted the ECOWAS CET and began tariff-free trade with ECOWAS members (Guinea-Bissau joined in 2016).
  - WAEMU members have prohibited restrictions on capital movement within the Union (for capital belonging to residents of WAEMU members) and granted rights to move across member states and eliminated labor market discrimination based on nationality except for public service positions. Member states must notify and justify restrictions on the four freedoms to the WAEMU Commission (articles 79 and 94 of the WAEMU Treaty).
- Remaining gaps:
  - The WAEMU Treaty does not extend to important trade-affecting areas such as customs procedures, sanitary and phytosanitary measures, and technical norms.
  - As a result, WAEMU remains some way from establishing a full single market despite the common currency and CET.

### E. Trade environment, customs, and facilitation
- General constraints:
  - The most important factor constraining intra-African trade is the challenging trade environment, including limited transport infrastructure (trans-border road, rail, port and air transport networks and border and Customs procedures), telecommunication infrastructure, financial development, human capital, and institutions, as well as restrictive product and labor market regulations.
  - The trade environment in WAEMU countries is as challenging as in other Sub-Saharan African countries on average, with substantial heterogeneity across WAEMU countries.
- Country-level assessments:
  - Burkina Faso, Niger, and Togo are ranked particularly low in trade infrastructure, financial development, security, human capital development, and product and labor market regulations.
  - Senegal scores broadly high across the board.
  - Cote d’Ivoire scores high in trade infrastructure and security and poorly on telecommunications.
  - Benin does not show excessive weaknesses.
  - Mali scores poorly on governance.
  - Data availability note: Information on Guinea-Bissau’s trade environment is not available.
- Customs and border processes:
  - WAEMU agreement does not cover streamlining and harmonization of Customs and border procedures; many members still impose challenging Customs and border processes.
  - On average, WAEMU members perform fairly well in freedom of transit and transparency of trade regulations, but there is room to improve cross-border paperless trade procedures and measures benefiting women and SMEs.
  - Heterogeneity in implementation of trade facilitation measures (share of implemented measures within each category, percent):
    - Benin: implemented nearly 86 percent of potential measures to streamline processes.
    - Mali: implemented only a third.

### F. AfCFTA objectives, progress, and quantitative methodology
- AfCFTA objectives and progress:
  - All WAEMU members are parties to the AfCFTA.
  - Signed by 44 African nations in 2018; came into effect in May 2019.
  - Aims to eliminate tariffs on 97 percent of tariff lines, representing at least 90 percent of imports by value, by 2030.
  - Aims for “deep” trade integration by lowering tariffs and addressing behind-the-border regulations that result in NTMs, streamlining Customs and border processes, liberalizing trade in services, and establishing dispute settlement mechanisms.
  - Progress to date:
    - Signatories have reached consensus on key features of protocols on trade in goods and services, investment, competition policies, and digital trade.
    - A substantial majority of AfCFTA members, including all ECOWAS (and hence WAEMU) countries, have submitted tariff offers and schedules of concessions for key service sectors. (The tariff offer was submitted by ECOWAS as a bloc.)
    - Agreement reached on rules of origin for 92 percent of tariff lines (as of February 2024).
    - Some countries have implemented tariff offers in domestic legislation; a select group commenced trading certain goods under a pilot “Guided Trade Initiative” in October 2022.
  - Note: AfCFTA removal of NTMs is expected to be slow under current procedures (traders must raise individual NTMs one by one).
- Quantitative approach:
  - Gravity estimation in two steps (as in Abbas and others, 2023).
  - Step 1: estimate elasticity of bilateral trade flows to tariffs, NTMs, and trade environment measures using Poisson pseudo-maximum likelihood with log of bilateral trade flows as dependent variable; independent variables include log of weighted average bilateral tariffs plus one, log of weighted average number of NTMs, log of bilateral distance, and dummies for common language, colonial origin, and border, origin and destination fixed effects, and measures of trade environment (including interactions with bilateral distance).
  - Step 2: quantify trade flows under counterfactual scenarios simulating AfCFTA provisions and translate changes in trade openness to potential effects on real income per capita using literature-based estimates (semi-elasticity of 1.25 between openness and GDP per capita).

### G. Scenario definitions and results
- Scenarios:
  - “AfCFTA scenario”:
    - 90 percent reduction in existing tariffs between AfCFTA signatories.
    - 50 percent reduction in the number of non-tariff measures.
  - “AfCFTA+ scenario”:
    - AfCFTA scenario’s tariff and NTM reductions combined with improvements in infrastructure, financial development, and security that bring WAEMU members to the median performance level of the next-best performing free trade agreement (ASEAN or Mercosur, depending on the indicator).
- AfCFTA scenario effects:
  - Median WAEMU member’s openness would increase by 1.5 percentage points.
  - Associated with a 2 percent increase in long-term real income per capita (using semi-elasticity of 1.25).
  - The assumed reduction in NTMs would increase openness by an average one percentage point in WAEMU members — double the effect of the assumed tariff reductions.
- AfCFTA+ scenario effects:
  - WAEMU members’ median merchandise trade flow with other African countries could rise by more than 40 percent.
  - Intra-WAEMU trade could increase by more than 30 percent.
  - Trade flows with countries outside of Africa would also rise.
  - Estimated income gains of 10 percent.
- Trade facilitation measures:
  - Implementing half of the outstanding measures by WAEMU members could increase their openness by 1-2 percentage points.
  - That could raise incomes by 1.3-2.5 percent.
- Fiscal considerations:
  - Estimates suggest eventual effects of tariff reductions on WAEMU members’ fiscal revenue will be small — less than 0.1 percent of GDP for each WAEMU member.

### H. Policy implications and recommendations
- Advance AfCFTA negotiations and implementation:
  - Finalize negotiations on remaining tariff lines and rules of origin, advance services trade liberalization, and complete annexes to remaining protocols.
  - Implement AfCFTA agreements in domestic law (new tariff schedules, rules of origin, future agreements on services trade) and ensure Customs administrations are ready to implement AfCFTA tariffs and rules of origin.
  - Inform the business community about AfCFTA opportunities and related changes in Customs and border processes.
- Adopt a more ambitious approach to removing NTMs:
  - Advocate with AfCFTA partners for a proactive and comprehensive review and alignment of national regulations that create NTMs, rather than relying solely on the current trader-initiated process.
  - WAEMU members should undertake a pro-active and systematic effort to reduce NTMs within the WAEMU as a model for continent-wide efforts.
- Strengthen the trade environment cost-effectively:
  - Prioritize enhancements that differ by country; building new transport infrastructure can yield large trade gains but is costly and long-term.
  - Prioritize trade facilitation through streamlining and digitization of Customs and border processes as a more affordable, administratively focused approach.
  - Implement select trade facilitation measures (digitalization of customs procedures and supportive trade environment for women and SMEs identified as high-potential areas).
- Maintain macroeconomic stability:
  - Continue efforts to strengthen domestic fiscal revenue sources to offset potential AfCFTA-related revenue losses.
- Support workforce and social protection:
  - Invest in workforce skills to help workers take advantage of trade integration opportunities.
  - Strengthen social safety nets to target support during transition periods and ensure gains are shared widely and equitably.

### I. Conclusions
- WAEMU members’ trade openness has grown only modestly in the past two decades; integration into global value chains and export diversification remain limited.
- Three key constraints persist: elevated import tariffs, high non-tariff measures, and a challenging trade environment — all limiting trade with countries outside ECOWAS and constraining intra-WAEMU trade.
- Combining AfCFTA implementation with targeted improvements in the trade environment offers the largest gains for trade and incomes in WAEMU countries.

*Source: sipea2025071*

### 1.   T

### Trade Integration in the WAEMU: Goals, Implementation, and Remaining Challenges

### A. Introduction
- Trade integration promotes efficiency, economies of scale, structural transformation, innovation, productivity, and attracts foreign direct investment.
- The African Continental Free Trade Area (AfCFTA) aims to:
  - Expand intra-African trade in goods and services by progressively eliminating tariffs and non-tariff measures.
  - Improve the trade environment by simplifying and harmonizing customs regulations and border processes.
  - Harmonize regulations for goods and services provision, investment regimes, intellectual property rights, competition, and digital trade, with the eventual objective of a single continental market.

### B. Taking Stock of Trade and Trade Integration in the WAEMU
Key findings on WAEMU trade performance and structure:
- Trade openness:
  - WAEMU trade openness (exports plus imports as a share of GDP) rose from 48 to 52 percent over 2000-19.
- Intra-African exports:
  - On average, WAEMU members’ exports to other African countries (including WAEMU members) accounted for only one-quarter of WAEMU countries’ exports in 2019.
  - By comparison, the EU records 60 percent of trade among member countries.
- Global value chain (GVC) integration:
  - GVC integration within WAEMU is approximately half that of the European Union (EU) and one-twentieth that of the former NAFTA countries.
  - Backward and forward linkages remain underdeveloped within the region and with the global economy.
  - Trade agreements account for 40 percent of the GVC integration differences between African nations and comparators.
- Export composition and diversification:
  - Exports beyond Africa are dominated by fuel and primary goods.
  - The proportion of processed goods in WAEMU members’ exports to the rest of the world is 43 percent, compared with 60 percent in ASEAN.
  - Exports to African countries show moderately greater diversification, indicating potential diversification opportunities from deeper intra-African trade (noting caveat about possible reexports).
- Data caveat:
  - Significant informal trade is not captured in statistics; informal flows could account for as much as 30-50 percent of intraregional trade in estimates cited.

### C. Trade Policy-Related Obstacles to Greater Integration
Tariffs, non-tariff measures (NTMs), and trade environment issues:
- Tariffs:
  - Through the ECOWAS CET, WAEMU members impose tariffs averaging 9-10 percent on goods coming from outside ECOWAS.
  - WAEMU members’ exports to countries outside ECOWAS face tariffs of 9-10 percent as well.
- Non-tariff measures (NTMs):
  - NTMs are government regulations other than tariffs (including sanitary and phytosanitary measures and technical barriers to trade, TBTs).
  - NTMs between WAEMU countries and other African countries hinder trade by as much as tariffs of 15 percent would.
  - Across African countries more generally, NTMs are equivalent to an import tariff of 18 percent on average.
  - NTMs hamper trade even among WAEMU countries; NTMs are estimated to hinder trade among WAEMU members by as much as import tariffs of 17 percent would.
  - Country-specific NTM levels within WAEMU: Senegal and Cote d’Ivoire at 10 percent; Mali at 27 percent.
- Trade environment:
  - Limited transport infrastructure and cumbersome customs and border processes weigh on trade, including intra-WAEMU trade.
  - The WAEMU trade integration agreement does not cover several important areas affecting trade, including harmonization of sanitary, phytosanitary, and technical regulations, and does not extend to streamlining and harmonizing customs and border processes.

### Box: WAEMU Trade Integration — Goals, Implementation, Remaining Challenges
- Goals and institutional measures:
  - WAEMU aims to create free trade and eventually a single market based on common trade policies and the “four freedoms” (free movement of goods, services, capital, and labor; Article 4 of the WAEMU Treaty as revised in 2003).
  - A customs union began in 2004 with a common external tariff (CET) and tariff-free trade among members.
  - In 2015 ECOWAS adopted a CET; WAEMU countries adopted the ECOWAS CET and began tariff-free trade with ECOWAS members (Guinea-Bissau joined in 2016).
  - WAEMU members have prohibited restrictions on capital movement within the Union (for capital belonging to residents of WAEMU members) and granted rights to move across member states and eliminated labor market discrimination based on nationality except for public service positions. Member states must notify and justify restrictions on the four freedoms to the WAEMU Commission (articles 79 and 94 of the WAEMU Treaty).
- Remaining gaps:
  - The WAEMU Treaty does not extend to important trade-affecting areas such as customs procedures, sanitary and phytosanitary measures, and technical norms.
  - As a result, WAEMU remains some way from establishing a full single market despite the common currency and CET.

*Source: IMF staff analysis in "UNLEASHING THE BENEFITS OF INTRA-AFRICAN TRADE INTEGRATION FOR THE WAEMU," Selected Issues paper.*

### 11.      A challenging trade environment creates additional obstacles to WAEMU members’

### 11.      A challenging trade environment creates additional obstacles to WAEMU members’ trade, including within the WAEMU

### Trade environment in WAEMU
- The most important factor constraining intra-African trade is the challenging trade environment, including limited transport infrastructure (trans-border road, rail, port and air transport networks and border and Customs procedures), telecommunication infrastructure, financial development, human capital, and institutions, as well as restrictive product and labor market regulations.
- The trade environment in WAEMU countries is as challenging as in other Sub-Saharan African countries on average, with substantial heterogeneity across WAEMU countries.
- Country-specific assessments:
  - Burkina Faso, Niger, and Togo are ranked particularly low in trade infrastructure, financial development, security, human capital development, and product and labor market regulations.
  - Senegal scores broadly high across the board.
  - Cote d’Ivoire scores high in trade infrastructure and security and poorly on telecommunications.
  - Benin does not show excessive weaknesses.
  - Mali scores poorly on governance.
- Data availability note: Information on Guinea-Bissau’s trade environment is not available.

### Customs, border processes, and trade facilitation
- WAEMU agreement does not cover streamlining and harmonization of Customs and border procedures; many members still impose challenging Customs and border processes.
- On average, WAEMU members perform fairly well in freedom of transit and transparency of trade regulations, but there is room to improve cross-border paperless trade procedures and measures benefiting women and SMEs.
- Heterogeneity in implementation of trade facilitation measures (share of implemented measures within each category, percent):
  - Benin: implemented nearly 86 percent of potential measures to streamline processes (table shows BEN overall Trade Facilitation Index = 86? — the source lists categorical values including BEN100100781008167471005686).
  - Mali: implemented only a third (table shows MLI overall values including 34).
- The “transit” category measures include limits on physical inspection of transit goods and support for pre-arrival processing. “Transparency” measures include publication of export/import regulations online and advance publication of new trade-related regulations.

### AfCFTA trade integration — objectives and progress
- All WAEMU members are parties to the AfCFTA. The agreement:
  - Signed by 44 African nations in 2018; came into effect in May 2019.
  - Aims to eliminate tariffs on 97 percent of tariff lines, representing at least 90 percent of imports by value, by 2030.
  - Aims for “deep” trade integration by lowering tariffs and addressing behind-the-border regulations that result in NTMs, streamlining Customs and border processes, liberalizing trade in services, and establishing dispute settlement mechanisms.
- Progress to date:
  - Signatories have reached consensus on key features of protocols on trade in goods and services, investment, competition policies, and digital trade.
  - A substantial majority of AfCFTA members, including all ECOWAS (and hence WAEMU) countries, have submitted tariff offers and schedules of concessions for key service sectors. (The tariff offer was submitted by ECOWAS as a bloc.)
  - Agreement reached on rules of origin for 92 percent of tariff lines (as of February 2024).
  - Some countries have implemented tariff offers in domestic legislation; a select group commenced trading certain goods under a pilot “Guided Trade Initiative” in October 2022.
- AfCFTA removal of NTMs is expected to be slow under current procedures (traders must raise individual NTMs one by one).

### Quantitative approach and scenarios
- Methodology:
  - Gravity estimation in two steps (as in Abbas and others, 2023).
  - Step 1: estimate elasticity of bilateral trade flows to tariffs, NTMs, and trade environment measures using Poisson pseudo-maximum likelihood with log of bilateral trade flows as dependent variable; independent variables include log of weighted average bilateral tariffs plus one, log of weighted average number of NTMs, log of bilateral distance, and dummies for common language, colonial origin, and border, origin and destination fixed effects, and measures of trade environment (including interactions with bilateral distance).
  - Step 2: quantify trade flows under counterfactual scenarios simulating AfCFTA provisions and translate changes in trade openness to potential effects on real income per capita using literature-based estimates (semi-elasticity of 1.25 between openness and GDP per capita).
- Scenarios:
  - “AfCFTA scenario”:
    - 90 percent reduction in existing tariffs between AfCFTA signatories.
    - 50 percent reduction in the number of non-tariff measures.
  - “AfCFTA+ scenario”:
    - AfCFTA scenario’s tariff and NTM reductions combined with improvements in infrastructure, financial development, and security that bring WAEMU members to the median performance level of the next-best performing free trade agreement (ASEAN or Mercosur, depending on the indicator).

### Scenario results and key statistics
- AfCFTA scenario effects:
  - Median WAEMU member’s openness would increase by 1.5 percentage points.
  - Associated with a 2 percent increase in long-term real income per capita (using semi-elasticity of 1.25).
  - The assumed reduction in NTMs would increase openness by an average one percentage point in WAEMU members — double the effect of the assumed tariff reductions.
- AfCFTA+ scenario effects:
  - WAEMU members’ median merchandise trade flow with other African countries could rise by more than 40 percent.
  - Intra-WAEMU trade could increase by more than 30 percent.
  - Trade flows with countries outside of Africa would also rise.
  - Estimated income gains of 10 percent.
- Trade facilitation measures:
  - Implementing half of the outstanding measures by WAEMU members could increase their openness by 1-2 percentage points.
  - That could raise incomes by 1.3-2.5 percent.
- Fiscal considerations:
  - Estimates suggest eventual effects of tariff reductions on WAEMU members’ fiscal revenue will be small — less than 0.1 percent of GDP for each WAEMU member.

### Policy implications and recommendations
- Advance AfCFTA negotiations and implementation:
  - Help move AfCFTA discussions forward: finalize negotiations on remaining tariff lines and rules of origin, advance services trade liberalization, and complete annexes to remaining protocols.
  - Implement AfCFTA agreements in domestic law (new tariff schedules, rules of origin, future agreements on services trade) and ensure Customs administrations are ready to implement AfCFTA tariffs and rules of origin.
  - Inform the business community about AfCFTA opportunities and related changes in Customs and border processes.
- Adopt a more ambitious approach to removing NTMs:
  - Advocate with AfCFTA partners for a proactive and comprehensive review and alignment of national regulations that create NTMs, rather than relying solely on the current trader-initiated process.
  - WAEMU members should undertake a pro-active and systematic effort to reduce NTMs within the WAEMU as a model for continent-wide efforts.
- Strengthen the trade environment cost-effectively:
  - Prioritize enhancements that differ by country; building new transport infrastructure can yield large trade gains but is costly and long-term.
  - Prioritize trade facilitation through streamlining and digitization of Customs and border processes as a more affordable, administratively focused approach.
  - Implement select trade facilitation measures (digitalization of customs procedures and supportive trade environment for women and SMEs identified as high-potential areas).
- Maintain macroeconomic stability:
  - Continue efforts to strengthen domestic fiscal revenue sources to offset potential AfCFTA-related revenue losses.
- Support workforce and social protection:
  - Invest in workforce skills to help workers take advantage of trade integration opportunities.
  - Strengthen social safety nets to target support during transition periods and ensure gains are shared widely and equitably.

### Conclusions
- WAEMU members’ trade openness has grown only modestly in the past two decades; integration into global value chains and export diversification remain limited.
- Three key constraints persist: elevated import tariffs, high non-tariff measures, and a challenging trade environment — all limiting trade with countries outside ECOWAS and constraining intra-WAEMU trade.
- Combining AfCFTA implementation with targeted improvements in the trade environment offers the largest gains for trade and incomes in WAEMU countries.

*Source: sipea2025071*

---


_Source: https://www.imf.org/-/media/files/publications/selected-issues-papers/2025/english/sipea2025071.pdf_