Nigeria’s recession slows down West African economy
With 0.4% real GDP growth in 2016, West Africa has recorded the lowest growth rate in Africa, far below the continental average (2.2%) and the best-performing region of East Africa (5.3%). The situation can be explained by the economic downturn in Nigeria, which has slipped into recession (- 1.5%) during the second term of 2016, due to the drastic fall in oil prices as well as the fragile security situation and political uncertainty. In fact, Nigeria accounts for two-thirds of West Africa’s GDP and nearly a third of Africa’s GDP. Nigeria’s recession therefore dragged down West Africa’s economy and had an adverse effect on Africa’s GDP growth, more so than the recessions in Chad (-3.4%) or Libya (-8.1%). A closer look at GDP growth rates per country reveals that all eight economies of the West African Economic and Monetary Union (UEMOA) recorded positive growth rates in 2016, ranging from 4% in Benin to 8.4% in Côte d’Ivoire. The latter remains Africa’s fastest growing economy, but still relies on exporting raw materials, especially crops, which are subject to global price fluctuations and climate risks. GDP growth in Ghana, the second strongest economy in the Economic Community of West African States (ECOWAS), slowed down for the fifth consecutive year, from 3.9% in 2015 to 3.3% in 2016. Ghana also continues to experience high levels of inflation (17%), but economic activity is expected to pick up again in 2017. In terms of GDP per capita, Cabo Verde leads the region with USD 6 800 (PPP). Liberia and Niger both remain at the bottom-end, with a GDP of less than USD 1 000 per capita. According to the African Economic Outlook 2017, growth prospects are positive. With the expected rebound in oil prices, Nigeria’s economy is projected to grow by 2.2% in 2017 and 4.8% in 2018. West Africa might then record an improved growth performance of 3.4% in 2017.