By Onome Amuge.
West Africa experienced slower economic growth over the past year as the region’s average gross domestic product declined to 3.8 per cent in 2022 from 4.4 per cent in 2021, a reflection that the growth recovery from the 2020 downturn had slowed, according to the African Development Bank’s (AfDB’s) 2023 West Africa Economic Outlook report.
The report,titled “Mobilising Private Sector Financing for Climate and Green Growth in West Africa”, was launched on July 27, and contains an assessment of the economic performance of 15 West African countries including Benin, Burkina Faso, Cabo Verde, Côte d’Ivoire, The Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo.
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Findings by the African Development Bank showed that most of the countries in the region experienced a slowdown in economic growth in the reviewed period except for Cabo Verde, The Gambia, Guinea, Mali, and Niger.
The report attributes decelerating growth to, among other factors, such successive shocks as the resurgence of Covid-19 in China, a major trade partner for the region’s countries.
It also factored in Russia’s invasion of Ukraine which also spurred inflationary pressures on the cost of food, fuel and fertiliser in many West Africa region countries.
The report further reveals that advanced economies have also tightened monetary policy, which has heightened aversion to risk globally and increased exchange rate pressures.
However, it notes that the region’s GDP growth outlook is positive, and projected to pick up slightly, hitting 3.9 per cent in 2023 and 4.2 per cent in 2024.
The report also provides key economic trends in 2022 as well as medium-term (2023-2024) economic forecasts for the region, while evaluating strategies to accelerate the mobilisation of private sector financing for climate and green growth in West Africa.
The 2023 West Africa Economic Outlook report notes that adapting to climate change and the depletion of the region’s natural resources present an opening for businesses and governments to embrace sustainable and green growth.
According to the report, “West Africa has enormous potential to achieve green growth, green industrialisation being the most obvious pathway. The rationale for green growth across the region is quite comprehensive: climate change impacts and risks, natural capital depletion, poverty, and food insecurity, as well as limited employment creation and many capital-intensive enclaves.”
Speaking during the report launch in Abidjan, Ivory Coast, Kevin Urama, AfDB chief economist and vice president for economic governance and knowledge management, observed that multiple challenges had led to rising interest rates and were compounding debt service payments to African countries.
Urama explained that these included climate change, inflation driven by higher prices of energy, commodities, and disruption of supply chains, as well as the tightening of monetary policy in the United States and Europe.
The economic expert added that greater effort will be needed in Africa to mobilise domestic resources and private sector financing to help countries achieve climate and green growth transitions.
Quoting from the report, he said: “Africa can accelerate its green development transitions by optimising its natural capital, estimated at about $6.2 trillion in 2018.”
Urama lamented that the continent, however, was not getting the best out of its natural resources because of poor valuation, degradation, illicit capital flows and losses from royalties and taxes.
Guy Blaise Nkamleu, lead economist,in his presentation, pointed out that four of the fifteen West African countries,namely Guinea-Bissau, Mali, Liberia, and Niger, were ranked among the ten most vulnerable countries to climate change and environmental hazards worldwide.
Nkamleu advised West African governments to deploy innovative instruments and mechanisms in order to attract private sector financing for climate change and green growth.