PLATEAU STATEPLOYTECHNIC, BARKIN LADI

DEPARTMENT OF MAKETING

BY
GROUP 2
PSP/SABS/MKT/HND/2015/509
SN

NAME
VUMPARK MAKSAT SHUAIBU

MATRIC NO.
0038

LUKA NANCHIN MARIA

0002

ADAMS SANDRA JIBIRWA

0023

1.

2.

3.

QUESTION:
CAREFULLY EXAMINE THE ROLES AND IMPACT OF ECOWAS
INVESTMENT AND DVELOPMENT BANK

SUBMITTED TO:
PRINCE LUKA MANGUT

SEPTEMBER, 2016

INTRODUCTION
The ECOWAS Bank for Investment and Development (EBID) is the principal
financial institution of the Economic Community of West African States
(ECOWAS). It is based in Lom, Togo.
EBID, the holding company operates through its two subsidiaries, the ECOWAS
Regional Development Fund (ERDF) and the ECOWAS Regional Investment
Bank (ERIB).
ERDF focuses primarily on the public sector while ERIB deals with the private and
commercial sectors. EBID is also the financing bank of the New Economic
Partnership for African Development (NEPAD) projects in the region. EBID plays
a similar role to that played by the European Investment Bank within the European
Union.
ECOWAS was created in 1975 to provide member states with collective bargaining
clout, to stimulate trade and investment within the community and to harmonise
some infrastructure projects, such as roads and railways.
ECOWAS MEMBER STATES
The Economic Community of West African States comprises the following 15
countries: Benin, Burkina Faso, Cape Verde, Cte dIvoire, The Gambia, Ghana,
Guinea, Guinea Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and
Togo. Members of Union Economique et Montaire Ouest Africaine (Uemoa):
Benin, Burkina Faso, Cte dIvoire, Guinea Bissau, Mali, Niger, Senegal and Togo.
MISSION OF ECOWAS BANK FOR INVESTMENT & DEVELOPMENT
EBID's mission is to facilitate business and investment in West Africa.
The EBID Group is ready to offer you its thirty-year long know-how and expertise
on the region. EBID is a transparent international financial institution capable of
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adapting itself to changing regional and global economic challenges. EBID

provides quality service and added-value through its appraisal and follow-up of
investment projects and development programmes. With its lending activities and
ability to mobilize financial resources, EBID increases the quantity and quality of
funding options. EBID also contributes to the development of financial and capital
markets throughout the ECOWAS region. EBID is staffed by qualified and
multilingual experts from all ECOWAS member states. EBID works in close
coordination with the member states and other Institutions of the ECOWAS region.
EBID also cooperates with the private business and the financial sector as well as
major international organizations in the field of investment and development.
THE ROLES OF ECOWAS BANK INVESTMENT AND DEVELOPMENT
It has become clear to West African leaders that there was strength in numbers,
especially as the West African economic zone contained several small economies
that were unlikely to make headway individually.
The ECOWAS treaty was signed on 28 May, 1975 in Lagos. One of the aims was
gradually to integrate the economies of the sub-region to forge a large and vibrant
trading bloc. It was also an attempt to collectively attack poverty while
simultaneously developing regulatory and infrastructural links.
One of the significant features of ECOWAS is that the grouping contains a very
wide diversity of economies in terms of size, development and resources. It is also
a region that has experienced, and continues to experience, violent conflicts in
some member states although these have reduced considerably over the last
decade.
To its great credit, ECOWAS has not buried its head in the sand in the face of these
challenges. It has been very active in conflict resolution and prevention through a

combination of intense discussions at the highest political levels and direct

intervention.
EBID, as part of its brief to foster greater integration among member states,
created, in conjunction with the African Development Bank, a Conflict Prevention
Fund in 2004. The Fund is managed by EBID.
At its inception in 1975, ECOWAS set up a Fund for Cooperation, Compensation
and Development, commonly known as the ECOWAS Fund. The ECOWAS Fund
was directed mainly at the public sector and was used to finance projects that
contributed to the greater integration of the region for example, to provide access
to ports for landlocked countries.
In the 1990s, as globalization spread, changing the traditional patterns of
international trade, economic blocs acquired a new significance. For example,
investment risks, especially those posed by smaller economies, can be minimized
through a regional approach and economies that would have floundered on their
own in an increasingly competitive world can be given a new lease of life by being
allied to stronger regional economies. Furthermore, environmental issues can only
be realistically dealt with on a regional basis rather than by individual states.
The nature of internal economies also changed considerably with the shift away
from state-owned and operated organizations to privatization. Privatization often
presents considerable technical problems and requires carefully modulated
financing by highly skilled and specialized experts.
With this in mind, the ECOWAS Conference of Heads of State and Government,
meeting in Lom in 1999, decided to transform the ECOWAS Fund into the
holding company EBID with its two subsidiaries, ERIB and ERDF, to deal with the
new realities.
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With this change, EBID added a private sector focus responding to the multiple
privatisations in the region and to support the private sector as the engine of
sustainable growth. At the same meeting, West African leaders resolved to work
towards creating a single entity out of ECOWAS and the Union Economique et
Montaire Ouest Africaine (Uemoa). Uemoa is a grouping of eight francophone
countries using a single currency, the CFA. All eight members of Uemoa are also
members of ECOWAS. The goal is to marry the CFA with the proposed single
currency for The Gambia, Ghana, Guinea, Nigeria and Sierra Leone (the Eco) to
set up a single monetary zone in the future. By bonding together to promote the
free movement of people and goods, the coastal and landlocked countries will
bolster each other's economies as well as that of the region.
Through financing cross-border investments and projects, EBID is assisting West
Africa to achieve this goal of greater co-operation, development and prosperity.
1. One of the role of the EBID is focus on infrastructure
2. And to create a powerful body which would enable and encourage greaten
financing to the private sector which will result to wealth creation and as
well.
3. encourage employment opportunity in the sub-region
4. They also finance public sector project which focus on issues such as
poverty reduction and basic infrastructure development.
5. They also finance project from the private sectors as well as meeting the
demand of the private sector needs of the biz county. In the private sector,
they involve in project such as oil and gas, bank and hobble industry
6. They also finance project like energy, telecommunication and transport this
is done by co-financing project with Africa Development Bank ADB and

Bangue Quest Africanize development (BDAD) and guaranteed a bond

issue.
EBID and NEPAD
When NEPAD was created, ECOWAS was designated in the Plan of Action as the
implementing agency for its programmes in the sub-region. All ECOWAS projects
were therefore placed under the umbrella of NEPAD for example the West
African Gas Pipeline and the West African Power Pool. The ECOWAS Fund had
been financing these important regional integration projects for many years and
when EBID took over, it continued financing them. EBID therefore became the de
facto financing bank of NEPAD programmes in West Africa.
ERIBs activities include:
Granting medium and long-term loans for commercial projects in all sectors
Granting loans to national financial institutions or for on-lending to
SME/SMIs under refinancing agreements and lines of credit
Participating in equity capital and providing quasi capital
Issuing and guaranteeing borrowings, national, regional or international
bonds and securities
Financing feasibility studies of investment projects
Providing financial engineering and other financial services.
Areas of intervention: Telecommunications (mobile and fixed line); energy
(production, transportation and distribution); water (treatment and recycling); ports
and airports (construction, renovation, capacity building); transport (roads and toll
bridges, railways); environment (treatment and recycling of waste); industry (all
forms); hospitals and private clinics; hotels and real estate.
ERDF activities include:
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 Granting medium and long-term concessionary loans for basic infrastructure

and economic and social projects in member states
Granting loans for the implementation of special Community programmes
defined by the ECOWAS Executive Secretariat
Granting loans for feasibility studies
Providing assistance to member states
Implementing various activities relating to resource mobilization and
management of special funds.
Areas of intervention

Basic infrastructure;
Microfinance;
Health;
Education and professional training;
Rural and semi-urban development and environment (financing village

hydraulic systems and supporting grassroots development organizations);

Development of economic infrastructure (energy, industry, transport,
telecommunications, irrigation) and control of flooding of rivers, integration
of regional production into worldwide economy.
Impact of investing in ECOWAS Bank Investment and Development
Since the EBID Group is the main ECOWAS institution responsible for facilitating
the private sector, it has a key role in helping investors successfully invest in
the sub-region.
The ECOWAS market represents 234m consumers and enjoyed a growth rate of
3.7% in 2003, compared with 2.9% in 2002. The growth rate was higher than the
global growth rate for the same period and was also higher than that of the
industrialized countries, Latin America and the Caribbean.

In addition to ECOWAS substantial market, investing in the sub-region is a

gateway to larger markets. Companies can reach the 456m-strong European market
thanks to the Cotonou Agreement.
In terms of trade, ECOWAS (plus Mauritania) is the first Africa, Caribbean and
Pacific (ACP) region with near to 41% of total ACP-EU trade. Amongst the 10
most important ACP partners, five are from ECOWAS (Nigeria 18%, Liberia 5%,
Cte dIvoire 4%, Senegal 4% and Ghana 4%).
Under the EU-ACP Lom Convention and Cotonou Agreement, all ECOWAS
countries have benefited from preferential access to the EU market. For example,
in 2002, 32% of ECOWAS exports went to the EU and 99.8% of these products
enter the EU without customs duties.
Furthermore, Economic Partnership Agreements (EPAs) are replacing the current
non-reciprocal preferential trade regime, thus tackling all barriers to trade.
ECOWAS began negotiating a Regional Economic Partnership Agreement in 2003
and this will grant full duty and quota-free market access. Trade with the EU is
further facilitated by the fact that the West Africa Economic and Monetary Union
(Uemoa) market Benin, Burkina Faso, Cte dIvoire, Mali, Niger, Senegal,
Togo is part of ECOWAS. The Uemoa market is incorporated into the vast
economic and monetary zone structured around the euro. Europe already absorbs
more than half of the Uemoa countries exports, many of which enjoy
preferential tariffs. Moreover, investing in ECOWAS CFA countries also means
easier access to Central African markets since they also use the CFA franc.
Trade between ECOWAS markets and the US is facilitated by the Africa Growth
and Opportunity Act (AGOA). AGOA allows imports from eligible sub-Saharan
African countries to enter the United States duty-free. 12 out of the 15 ECOWAS
member states are eligible, namely Benin, Cape Verde, Cte dIvoire, The
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Gambia, Ghana, Guinea, Guinea-Bissau, Mali, Niger, Nigeria, Senegal and Sierra
Leone. In 2003, over 95% of US imports from AGOA-eligible countries entered
duty-free. US imports under AGOA were valued at just over $14bn in 2003, a 55%
increase from 2002.
ECOWAS major comparative advantage is that it re-groups West African countries
into a single trading bloc. Some of Africas strongest economies are part of this
bloc such as Nigeria, the fourth strongest economy on the African continent, with
a GDP of $50,202m in 2003, and the second strongest sub-Saharan economy. Cte
dIvoire is the 10th strongest economy on the African continent and the sixth
strongest economy in sub-Saharan Africa, with a GDP of $13,734m in 2003 and
Ghana is the ninth strongest sub-Saharan African economy with a GDP of $7,659m
in 2003.
CONCLUSION
Investing in this zone is also being made easier by the implementation of a
monetary union. The Gambia, Ghana, Guinea, Liberia, Nigeria and Sierra
Leone are expected to form a second monetary zone, the Eco, alongside the
Uemoas common monetary zone, the CFA, which is indexed to the Euro. These
two zones will then be merged into a single monetary zone in the future, thus
making trade in this zone even easier.

References
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Chilleh, F. F. (2013). ECOWAS Standby Force a tool for subregional stability. Nigerian Army Information Brief March
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Christain, N. A. (2002). African Business Interview on ECOWAS Bank for
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Thomas, A. K. (2010). The impact of ECOWAS for Political and
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