• Sunday, April 14, 2024
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BusinessDay

Niger, Senegal seen growing fastest in Africa ahead of Nigeria

Notes on monetary and financial stability

Niger, Senegal, Guinea-Bissau, Angola and Sao Tome and Principe are the top five African countries projected to have the fastest gross domestic product (GDP) growth rate in 2024, a BusinessDay analysis from the latest World Bank report shows.

The report, titled ‘Global Economic Prospect: Subdued Growth, Multiple Challenges,’ said growth in lower-income countries (LICs) such as Niger, Sudan and South Sudan is expected to improve this year from a weak performance in 2023.

“Sluggish growth last year mainly reflected increased political instability and violent conflict in some fragile LICs, especially Sudan, and weaker outturns in some metal exporting LICs facing lower global metal prices,” the report said.

It said peace building in Ethiopia was gradually yielding dividends and growth prospects for Niger, South Sudan, and Sudan were improving somewhat.

Further analysis of the report revealed that out of 46 countries in Africa, the top ten expected to see the fastest year-on-year growth rate this year are Niger with 10.5 percentage points followed by Senegal with 4.7 percentage points.

Guinea-Bissau had 2.8 percentage points, Angola had 2.3 percentage points and Sao Tome and Principe had 2.0 percentage points.

The rest are Zambia (1.9 percentage points), Burundi (1.3 percentage points), Malawi (1.2 percentage points), Republic of the Congo (0.9 percentage points) and Liberia (0.9 percentage points).

Nigeria, Africa’s biggest economy, ranked 27th on the list; the country’s GDP growth rate is projected to increase by 0.4 percentage points to 3.3 percent.

“Growth in Nigeria is projected at 3.3 percent this year and 3.7 percent in 2025—up 0.3 and 0.6 percentage points, respectively, since June—as macro-fiscal reforms gradually bear fruits. The baseline forecast implies that per capita income will reach its pre-pandemic level only in 2025,” the Washington-based lender, said.

It projected that growth would be driven mainly by agriculture, construction, services, and trade, as inflation should ease out gradually as a result of the exchange rate reforms and the removal of fuel subsidies.

“In Nigeria, growth softened to an estimated 2.9 percent in 2023. While services growth weakened markedly in 2023, partly driven by a disruptive currency demonetisation policy in the first quarter of 2023, annual oil production increased after a notable decline in previous years.

“These structural reforms are expected to boost fiscal revenue over the forecast period. Nigeria’s per capita income is projected to return to pre-pandemic levels only by 2025,” it added.

Last year was tough for Africa’s most populous nation as naira scarcity, the removal of petrol subsidy and naira devaluation increased inflation pressures, poverty and unemployment in the country.

The country’s GDP rose marginally by 2.54 percent (year-on-year) in the third quarter of last year from 2.51 percent in Q2 and 2.25 percent in the same period of 2022, according to the National Bureau of Statistics.

In December, headline inflation increased to 28.92 percent, marking the fastest annual pace in two decades.

Foreign investments plunged to $654.7 million in Q3, the lowest in at least 11 years, from $1.03 billion in the previous quarter. The country’s currency depreciated by 49.1 percent to N907.1 at the end of 2023 from N461.6 in 2022 on the official market.

 

More details on the top five African countries

Niger

Niger with a population of over 24 million is expected to have a GDP growth rate of 12.8 percent in 2024 from 2.3 percent recorded in 2023.

The country’s economy is based largely on subsistence crops, livestock, and some of the world’s largest uranium deposits.

Senegal

The country with a population of 18 million is driven by the services sector. The country is projected to achieve a GDP growth of 8.8 percent from 4.1 percent.

Its key industries include mining, construction, agriculture, fishing, tourism, and exports.

Guinea-Bissau

The country with a population of over two million people exports cashew to other countries. It is projected to have a GDP growth rate of 5.6 percent, up from 2.8 percent.

Angola

With a population of 34.5 million, Angola has an economy historically reliant on oil but has been diversifying into sectors like agriculture and mining and has a projected GDP growth of 2.8 percent in 2024.

Sao Tome and Principe
Sao Tome and Principe is a small, two-island, lower-middle-income country with a population of 234,312. The country has a projected GDP growth of 2.5 percent in 2024.