The African Development Bank (AfDB) has released an optimistic economic forecast for West Africa in 2023, predicting a marginal increase in the region’s Gross Domestic Product (GDP).
Despite challenges posed by the resurgence of COVID-19, geopolitical events, and tightening monetary policies, the AfDB’s projection offers a glimmer of hope for the West African economic bloc.
According to the AfDB’s 2023 West Africa Economic Outlook report titled “Mobilising Private Sector Financing for Climate and Green Growth in West Africa,” the GDP is expected to rise to 3.9 percent, up slightly from the 3.8 percent recorded in 2022. This growth, while modest, reflects the resilience and potential of the region.
The report acknowledges the difficult path West Africa has navigated over the past years, with the COVID-19 pandemic causing disruptions and the geopolitical landscape adding to uncertainties. The slowdown in growth is attributed to the successive shocks from the resurgence of COVID-19 in China, a major trade partner for West African countries.
Also, the report highlights the adverse impact of the Russian invasion of Ukraine, particularly on driving inflation in essential commodities such as food, fuel, and fertilizer. These price hikes have made these necessities more expensive than they were a year ago, affecting the purchasing power of consumers in the region.
Despite these challenges, the AfDB report paints a hopeful picture for the future. It suggests that the positive growth outlook could lead to a more robust GDP rise of 4.2 percent in 2024. This optimistic scenario is contingent on increased private sector funding in the green economy and sustainable energy, which aligns with the report’s emphasis on transitioning to a green economy.
The AfDB’s call for West African countries to mobilize more resources for the green sector comes at a crucial time when the negative impact of global warming is worsening climate conditions worldwide. With heatwaves setting record numbers, the urgency for a green growth transition is underscored, offering both economic and environmental benefits.
Professor Kevin C. Urama, African Development Bank Chief Economist and Vice President for Economic Governance and Knowledge Management, expressed concern about the challenges the continent faces, including rising interest rates and compounding debt service payments.
Urama highlighted the need for increased efforts to mobilize domestic resources and private sector financing to support climate and green growth transitions in Africa.
As West African countries navigate these complex external pressures, the AfDB’s forecast, albeit cautious, provides a roadmap for economic recovery and sustainable growth.
The report’s focus on the potential of green industrialization and optimizing natural capital demonstrates a forward-looking approach, aiming to unlock West Africa’s economic potential while addressing pressing climate and environmental concerns.
