African Economic Outlook 2015: Resilient economies, positive forecast for West Africa

10Jun2015
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by Maxime Weigert

An annual collaboration between the African Development Bank (AfDB), the OECD Development Centre and the United Nations Development Programme (UNDP), the African Economic Outlook 2015 (AEO) was launched on May 25, 2015, during the AfDB Annual Meetings. The report provides an overview of the economic and social development of Africa and provides two-year projections. It also includes analysis of a special theme—this year’s is territorial development and spatial inclusion—as well as a statistical annex and country notes. This post summarizes the economic outlook report for West Africa.

The year was marred by the Ebola crisis that struck the region. The epidemic was especially virulent in Guinea, Liberia and Sierra Leone, where it brought to a screeching halt the remarkable progress in macroeconomic and fiscal stability achieved by these countries over the last few years. By the end of March 2015, according to the World Health Organization (WHO), out of more than 25,000 reported cases, the number of reported deaths exceeded the 10,000 mark. The overwhelming majority of these deaths were in West Africa. The deficit in terms of GDP compared to the previous year forecast for the three most affected countries is estimated at about US $1.4 billion, or a loss of income per capita of approximately US $130 in Sierra Leone and around US $40 in Liberia and Guinea. Moreover, even though the spread of the virus to neighbouring countries was contained, the entire region has been affected due to a decline in cross-border trade and tourist arrivals, especially in Burkina Faso, Côte d'Ivoire, Gambia and Senegal.

Despite the impact of this crisis, the macroeconomic outlook at the regional level is encouraging. West Africa has managed to maintain a 6% growth in 2014, more than two points above the continental average. Growth is expected to slow to 5% in 2015 before rebounding to 6.1% in 2016, making West Africa the second most dynamic sub-region after East Africa. In Nigeria, growth accelerated to 6.3%, compared with 5.4% in 2013, once again driven by non-oil sectors and, in particular, services, manufacturing and agriculture, confirming the dawn of a diversified economy. Côte d'Ivoire recorded robust growth of 8.3% of GDP in 2014, driven by domestic and external demand. Benin, Niger and Togo are on a path to sustained growth, while the economy contracted slightly in Ghana. In Cabo Verde economic recovery remains slow due to the unfavourable economic conditions at the global and national levels. Finally, recovery continues in Mali and Guinea-Bissau, two countries that, after a sluggish period resulting from recent unrest, in 2014 registered growth rates of 5.8% and 2.6%, respectively.

GDP growth rate, by volume (%)

2013

2014 (e)

2015 (p)

2016 (p)

Africa

3.5

3.9

4.5

5.0

Central Africa

4.1

5.6

5.5

5.8

East Africa

4.7

7.1

5.6

6.7

North Africa

1.6

1.7

4.5

4.4

Southern Africa

3.6

2.7

3.1

3.5

West Africa

5.7

6.0

5.0

6.1

Benin

5.6

5.5

5.6

6.0

Burkina Faso

6.6

5.0

5.5

7.0

Cabo Verde

0.7

2.0

3.1

3.6

Côte d’Ivoire

8.7

8.3

7.9

8.5

Gambia

4.3

-0.7

4.2

5.2

Ghana

7.3

4.2

3.9

5.9

Guinea

2.3

0.6

0.9

4.3

Guinea-Bissau

0.9

2.6

3.9

3.7

Liberia

8.7

1.8

3.8

6.4

Mali

1.7

5.8

5.4

5.1

Niger

4.1

7.1

6.0

6.5

Nigeria

5.4

6.3

5.0

6.0

Senegal

3.5

4.5

4.6

5.0

Sierra Leone

20.1

6.0

-2.5

2.8

Togo

5.4

5.5

5.7

5.9

This economic dynamism is sustained by changes in the governance of the countries in the region. Elections in Nigeria in April 2015 were welcomed across the globe. Likewise, on the economic front, the business environment has improved. Four countries in West Africa are ranked among the world top 10 countries for business environment improvement between June 2013 and June 2014: Benin, Côte d'Ivoire, Senegal and Togo. The region has also made significant progress in terms of human development indicators (education, health, income), which rose much faster here than in other sub-regions, with the exception of East Africa. Particularly strong performances were recorded in Benin, Mali and Niger, as well as in Sierra Leone and Liberia before these two countries were hit by the Ebola outbreak.

While the African Economic Outlook 2015 reports difficult challenges ahead for West Africa, it also heralds bright prospects. Against all odds, the region has a palpable dynamism. This touch of optimism should not mask, however, the many challenges it still faces to improve on inclusive growth.


Comments

Philip horsu - 07/04/2016 08:36
please i want to know about Ghana economy and ranking
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