Economic growth in West Africa is projected to rise to 3.8% in 2018 and 3.9% in 2019, the African Development Bank (AfDB) said in its African Economic Outlook released yesterday.
The outlook, which said the region's economy rebounded to 2.5% in 2017, added that household consumption and the relative price recovery of certain materials are expected to contribute to this performance.
The report said after several good years, economic growth in West Africa stagnated at 0.5% in 2016.
The decline in the price of raw materials and the unimpressive performance of Nigeria, which alone accounts for about 70% of the sub region's GDP, were some of the key factors identified as responsible for stagnation.
Marie-Laure Akin-Olugbade, Deputy Director General of the African Development Bank for West Africa, identified job creation, especially for young people as the big challenge for the sub-region.
"The 2018 Regional Economic Outlook for West Africa presents a comprehensive analysis of the economy and the labor market of 15 countries, focusing on macroeconomic stability, employment and poverty of the population living in West Africa. Let us not forget that some of the countries in this sub-region are facing enormous security challenges," she said.
The regional economic studies were released in Tunis (North Africa), Abidjan (West and Central Africa), Nairobi (Eastern Africa) and Pretoria (Southern Africa).
"By offering regional approaches for the first time, we want to leverage the Bank's expertise and give more depth of analysis and relevance to this publication," said Celestin Monga, Chief Economist and Vice President of the African Development Bank's Economic Governance and Knowledge Management.
On the North Africa, the report said the region ended 2017 with growth of 4.9% of real GDP, up from 3.3% recorded in 2016. The region's economic performance is above a 3.6% average for the continent. Overall, growth in the North Africa region was fuelled by new high value-added sectors such as electronics and mechanics, as well as private and public consumption. The region's outlook remains positive for 2018 and 2019, on account of structural reforms. Growth in North Africa is expected to reach 5% and 4.6% respectively in 2018 and 2019.
According to Nnena Nwabufo, the Bank's Deputy Director General for the East Africa Region, the East African Economic Outlook highlights a number of policies that member countries must implement to transform their economies.
The report said the outlook remains positive for 2018 and 2019, with growth expected to continue, reaching 5.9% in 2018 and 6.2% in 2019.
On the Southern Africa, the report estimated at 1.6% on average in 2017, real GDP growth in Southern Africa is expected to improve to 2% in 2018 and 2.4% in 2019.
However, economic forecasts remain cautious, especially given the very different growth patterns of the region's economies. The economic "locomotive" of the region, South Africa, shows signs of slow growth, and possibly declining growth, while low-income countries and the economies in transition, such as Madagascar and Mozambique, recorded more important growth.
"High fiscal deficits and rising public debt pose challenges to macroeconomic stability in several southern African countries. Governments should put in place measures to improve the mobilization of domestic resources and funds from the private sector to ensure adequate levels of development spending, stimulate growth and create jobs, especially for young people, "said Stefan Muller, Bank's Senior Economist for Southern Africa.
On Central Africa, the report said "With improvements in the economic situations of Congo and Equatorial Guinea, the economic performance of the sub-region is expected to improve in 2018 and 2019. It would be good to include this improvement over time through the diversification of economies of the sub region," said Racine Kane, Deputy Director General of the African Development Bank for Central Africa.