'Nigeria’s poor growth will weaken West Africa’s economy' - World Bank warns

The World Bank (WB) has stated that the lower-than-average growth in the country will hold back the sub-region’s economic performance.

The World Bank revealed in a report on the economic outlook of Western and Central Africa.

According to them activities in the region were set to rise from 3.2 per cent in 2023 to 3.7 per cent in 2024 and further accelerate to 4.2 per cent in 2025–2026.

It disclosed: “In AFW, economic activity is set to increase from 3.2 per cent in 2023 to 3.7 per cent in 2024 and further accelerate to 4.2 per cent in 2025–2026. The subregion’s performance will be held back by the lower-than-average growth in Nigeria. Excluding this country, the AFW sub-region is projected to grow by 4.4 per cent in 2024 and 5 per cent in 2025–2026.”

The report continued that economic activities in the West African Economic and Monetary Union were projected to increase by 5.9 per cent in 2024 and 6.2 per cent in 2025 because of great performances of Benin, Côte d’Ivoire, Niger, and Senegal.

“A more stable macroeconomic environment, as the reforms’ initial shock dissipates, will lead to sustained but still slow growth of the non-oil economy. The oil sector is expected to stabilise with a recovery in production and slightly lower prices.

“Structural reforms will be needed to foster higher growth. Average inflation will remain elevated at 24.8 per cent in 2024, although it is expected to ease gradually to 15.1 per cent by 2026 on the back of monetary policy tightening and exchange rate stabilisation.

“A more accommodative monetary policy by the Central Bank of West African States would support private consumption.

“In line with the development of the offshore Baleine Oilfield, rising oil production and exports are expected to boost economic activity. Finally, investments in agriculture, manufacturing, and telecommunications are expected to increase as a result of reforms in the business environment,” the report indicated.

The World Bank concluded that Sub-Saharan Africa had been struggling to deepen and lengthen economic growth.

“Growth tends to be volatile, and when recessions arrive (with high frequency), they are deeper and longer than in other regions. This has had a substantial impact on how broad-based growth of people’s consumption spending in the region.

"Sub-Saharan Africa stands out globally as having the highest extreme poverty rate, high levels of inequality, and the weakest transmission of growth to poverty reduction. Of the 700 million people living in extreme poverty in 2019, 60 per cent of them were in Sub-Saharan Africa.”