While countries like South Sudan, Rwanda and Côte d’Ivoire are expected to top global economic performance and drive the African economy in the next five years to end 2024, Nigeria alongside its big African peers may be left behind, Brookings Institution’s annual Foresight report shows.
Based on the 2020-2024 growth estimates by the Washington-based institution, Senegal is expected to grow by an average of 8.3 percent in the review period while Rwanda (7.9%), Niger (7.3%), Uganda (7.2%), Mozambique (6.9%) and Ethiopia (6.9%) are also projected to be among the top performers.
Whereas these countries helped push up Africa’s overall average economic growth rate forecast to 3.8 percent, the average is weighed down closer to the global average (3.5%) by the two largest economies, Nigeria (2.3%) and South Africa (1.1%).
The Big three economies in Africa led by Nigeria (South Africa and Angola) are expected to grow at an average of 2.3 percent, 1.2 percentage points less than the global economic outlook.
According to Brahima Coulibaly, senior fellow and director, Africa Growth Initiative, Brookings Institution, seven of the world’s 10 fastest-growing economies will be from Africa, but performance will vary.
“While economies of countries like Senegal, Rwanda, and Niger will grow at over 7 percent, the largest three economies (Angola, Nigeria, and South Africa) will continue to struggle,” Coulibaly said.
The Nigerian economy continued to expand at a sluggish rate in the third quarter of 2019 after state data agency, the National Bureau of Statistics (NBS), reported a 2.28 percent growth for the period.
Although that’s the fastest growth in four quarters, it’s unlikely to resonate with many Nigerians because even though the headline GDP seems to be expanding, it is shrinking in per capita terms.
Since 2015, Nigeria’s GDP per capita has been on contraction mode every year and that helps explain why despite the growth in headline GDP, Nigerians are getting poorer.
Economic watchers believe Nigeria needs to grow much faster to pull large chunks of its 200-million strong population out of poverty. Economic reform has been slower than expected since February 2019’s presidential election.
Nigeria’s growth is projected to remain broadly unchanged, rising only to an average of 2.1 percent in 2020- 22, the World Bank says in its January 2020 Global Economic Prospects.
This is weaker than previous projections, reflecting softer external demand, lower oil prices, and a slower-than-previously-expected improvement in oil production given the lack of much-needed reforms.
“Growth in Nigeria is expected to remain subdued. The macroeconomic framework—characterized by multiple exchange rates, foreign exchange restrictions, high persistent inflation, and a central bank targeting manifold objectives—does not provide a firm anchor for confidence,” the Washington-based lender said.
The report said growing uncertainty about the direction of government policies is expected to further dampen the outlook.
According to the Institution, strong growth rates will be essential for Africa to achieve the Sustainable Development Goals (SDGs).
For low-performing economies like Nigeria “policy priorities will be to revive economic growth, while in the high growth economies, policymakers must ensure that growth is inclusive so the living conditions of all can improve,” it recommended.
Analysis of the data by the Washington-based institution reveals that the top-performing African countries based on 2015-2019 growth estimates include Ethiopia with an average of 8.7 percent, while Côte d’Ivoire, Rwanda, Guinea, and Senegal reported 7.9 percent, 7.5percent, 7.2percent, and 6.5 percent, respectively.
Also on the list of top performers in the last five years ended 2019 were Tanzania (6.4%), Burkina Faso (5.8%), and Kenya (5.7%). In the same period under review, the big three economies in Africa: Angola, Nigeria, South Africa reported an average growth of 0.9 percent
