Moody's: West African countries' exit from regional bloc could hinder growth

The decision of Burkina Faso, Mali and Niger to exit the Economic Community of West African States (ECOWAS) could hinder the bloc's economic growth, Moody's ratings agency said on Wednesday. It would be much more detrimental if they also decided to leave the West African Economic and Monetary Union (WAEMU), though that was not expected, the agency added.

The decision of Burkina Faso, Mali and Niger to exit the Economic Community of West African States (ECOWAS) could hinder the bloc's economic growth, Moody's ratings agency said on Wednesday.

It would be much more detrimental if they also decided to leave the West African Economic and Monetary Union (WAEMU), though that was not expected, the agency added. The three military junta-led countries announced on Sunday that they were planning to leave ECOWAS, the region's main economic and political bloc.

"The three countries' departures would disrupt the economic integration that is ECOWAS' raison d'etre and weigh on business confidence, potentially hindering the bloc's economic growth," said Moody's in a statement. "While not our baseline expectation, an exit from WAEMU would be much more detrimental to sovereigns leaving the monetary union because of the credit support that WAEMU membership provides in terms of macroeconomic stability and reduced external vulnerability," it added.