The member countries of the Alliance of Sahel States (ESA) – Burkina Faso, Mali, and Niger – have introduced a 0.5% customs tax on goods imported from other ECOWAS (Economic Community of West African States) states. This measure, effective since March 2025, aims to finance the ESA’s socioeconomic development projects, notably through a confederal levy transferred directly to the organization rather than to ECOWAS.
Main characteristics of customs taxes
Exemptions: Trade between the three member countries (Ouagadougou, Bamako, and Niamey) remains exempt from this tax.
- Economic impact: Mali has assured that this measure will not affect the prices of imported products, without specifying the consequences for non-WAEMU countries such as Ghana or Nigeria.
- Objective: The funds raised will be used for structural projects for regional growth and stability.
This decision comes in a regional context where other customs reforms are underway, such as in Madagascar with the 2025 Initial Finance Law aimed at modernizing customs operations and harmonizing the legislative framework.
Expected economic benefits of this new law
The expected economic benefits of the 2025 Initial Finance Law in Madagascar, although distinct from the AES measure, offer general lessons on the potential effects of customs reforms. Here are the main mechanisms identified in the Malagasy context:
1. Strengthening public revenue
The law provides for a 21.39% increase in tax revenue through:
- Rationalization of exemptions in Madagascar (elimination of VAT exemptions on certain products, taxation of bank interest and insurance contracts).
- New levies (mobile transaction tax, excise duty on harmful products).
These measures aim to fill budget deficits and finance public projects, as the AES envisages for its member countries.
2. Protection of local industries
The taxation of finished products (e.g., eyeglass lenses at a 20% customs duty) aims to:
- Stimulate domestic production by reducing competition from imports.
- Create jobs in protected sectors, in accordance with the stated objectives.
3. Administrative Harmonization and Modernization
The deployment of the SAFI system and the e-VAT platform enable:
- Strengthened control of exemptions and sales without invoices
- Fighting corruption through operational risk analysis
These measures improve tax efficiency and transparency, reducing losses related to tax evasion.
4. Differentiated Sectoral Impact
Tariff revisions (e.g., trucks at 5% customs duty) aim to:
- Balance economic policies between supporting key sectors (transport) and streamlining spending.
- Correct past distortions (e.g., decline in boat imports following a poorly calibrated exemption).
Risks and Limitations
Customs duties can have counterproductive effects, as the IMF points out:
- Increased prices for consumers and businesses dependent on imports.
- Loss of jobs in unprotected sectors or those exposed to retaliatory measures.
Comparison with the AES
The AES measure (0.5% tax on ECOWAS imports) shares similar objectives (financing regional projects). However, its impact will depend on its ability to avoid inflationary effects and retaliatory measures from non-member countries.
In Madagascar, customs reforms focus more on industrial protection and administrative modernization, while the AES focuses on regional solidarity.
