West Africa, as the name implies, is the region in the western part of Africa. It is the location of countries like Nigeria, Ghana, Burkina Faso, Senegal, and Liberia. Some of these countries are among the top sources for minerals, cash crops, oil and gas, and a large labour force. There are a total of 15 countries and an estimate of 400 million people.
In this article, we will be examining the latest industry statistics and the state of the economy in West Africa.
Exportation is the main contributor to the real GDP growth of West Africa. Its main exports include cocoa, cotton, minerals, plastic, petroleum products, machinery and electronics, wood and wood products, edible fruit, and fish.
Agriculture represents 35% of the regional GDP and 60% of the overall labour force. Although, maximum productivity is yet farfetched as a result of under-development, limited access to quality seeds and fertilizers, and the lack of information and modern technologies.
West Africa’s predominant export partners are Europe, the United States of America, the Middle East, and Asia. Nigeria supplies most of the goods taken out of the region, followed by the Ivory Coast. According to the ECOWAS Import and Export Report, Nigeria supplies 77% of regional exports, 10% from Ivory Coast, 4% from Ghana, 3% from Senegal, and 1.7% from Mali. Benin, Burkina Faso, Guinea, Togo, and Niger each supply 1% of regional exports. In essence, the regional economy flourishes on the shoulders of Nigeria, Ivory Coast, Senegal, and Ghana.
In 1975, the Economic Community of West African States was established to promote the economy of the region. Its economic contribution to the overall GDP of Africa has increased, compared to the last few years. According to the 2018 African Economic Outlook, the average GDP in 2016 was 0.5%, 2.5% in 2017, and projected to reach 3.8% in 2018 and 3.9% in 2019.
Before the COVID-19 outbreak, the West African economy was to grow by 4% in 2020. New projections picture it at 2% as a result of a decline in commodity prices, reduced earnings, dependence on external sources, and deficits. The COVID-19 pandemic hit at a time when West African economies were beginning to stabilize.
The high inflation projections on the region and other parts of the world are largely due to the global decline in the cost of commodities and the price of crude oil. Other than the general COVID-19 pandemic, another major challenge facing West African industries is underdevelopment.
There is a need for the governments to provide fiscal policies that support structural reforms for SMEs and local manufacturers, create more jobs for youths, properly manage resources, and encourage regional integration.
Written by Joy Ejere Uche