Intermediate tariffs and intraregional intermediate exports: Implications for regional value chains in ECOWAS

Barnabas Olusegun Obasaju, Wumi Kolawole Olayiwola, Henry Okodua, Oluwasegun Eseyin and Ayodele Victor Ahmed

Cogent Economics & Finance, 2019, vol. 7, issue 1, 1622179

Abstract: This paper primarily aims at analysing the impact of (intermediate) tariffs on intraregional intermediate exports between 2000 and 2015 with the aim of predicting the likely implications this has for regional value chains within the Economic Community of West African States (ECOWAS). As a secondary objective, the paper investigates whether corresponding effectively applied tariffs significantly affect other classification of exports—all products, raw products and consumer products. Paying attention to the Heckman Two-step technique, we find that tariffs on intermediate products do not significantly drive intermediate exports, inter alia. And as garnered from the auxiliary regression, generally, tariffs are not sufficiently low as to bolster intraregional exports in ECOWAS. The statistical insignificance of intermediate tariffs implicates that the prevailing effectively applied tariff levels is not likely to augur well for formation and strengthening of new and existing value chains in ECOWAS. The need for this regional economic community to consider reviewing tariffs downwards is exigent for both the success of value chains and regional trade integration in general.

Date: 2019
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DOI: 10.1080/23322039.2019.1622179

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