African Development Bank (AfDB) has said Nigeria and Ghana will likely experience slowest economic growth in 2024 when compared to their countries in the West African region.
According to the AfDB macro-economic performance outlook for 2024, the West African region is expected to grow by 0.8 per cent to 4.0 per cent this year and 4.4 per cent in 2025
The group also stated that aside from Nigeria and Ghana, every other country in the sub-region would likely grow by at least four per cent in 2024 with embattled Niger Republic leading the pack at 11.2 per cent, followed by Senegal and Ivory Coast at 8.2 per cent and 6.8 per cent respectively.
The bank stated that except for Nigeria and Ghana, all countries in the region were projected to grow at least four per cent in 2024. The bank’s forecast for Nigeria anticipates a growth rate of 2.9 per cent in 2024, improving to 3.7 per cent by 2025.
However, the modest growth trajectory is primarily linked to the repercussions of recent policy reforms, including the elimination of fuel subsidies and the efforts to consolidate the foreign exchange markets.
These measures, while aimed at stabilising the economy, have temporarily exacerbated the cost of living, suppressing both consumer spending and investment.
Despite these challenges, the report suggested that the strategic redirection of resources, specifically the $5 billion formerly allocated to fuel subsidies between 2022 and May 2023, towards vital social infrastructure, holds the promise of yielding significant long-term benefits over the immediate discomforts.
In contrast, Ghana’s economic growth is expected to slightly pick up to 2.8 per cent in 2024, from a sluggish 1.5 per cent in 2023. The analysis attributes the slow pace to persistent inflationary pressures that continue to strain household budgets, implying that inflation remains a critical barrier to Ghana’s economic revival and growth prospects.
Ghana and Nigeria grappled with an unprecedented economic downturn in 2023, marked by a staggering inflation rate that peaked at over 50 per cent.
However, recent reports indicate a significant easing of inflation to 23.4 per cent. The Ghanaian currency, the Cedi, also faced a steep devaluation of over 11 per cent in the first half of 2023
The country’s economic challenges began in December 2022, when it announced a suspension of payments on a major chunk of its $28.4 billion external debt, essentially defaulting.
However, Ghana secured a $3 billion deal with the International Monetary Fund (IMF), offering a glimmer of hope amidst its financial turmoil.
Like its counterpart in West Africa, Nigeria’s economic problems started with the currency redesign fiasco, followed by the twin reforms of President Tinubu: fuel subsidy removal and unification of the foreign exchange market.
