Nigeria’s slow growth drags West African economy — Afreximbank

Western Africa has experienced a decline in output growth as a result of Nigeria’s slow growth performance, a recent report by Afreximbank has said.

The Afreximbank’s ‘Africa in figures 2024’ report stated that the slow growth performance in Nigeria is largely due to volatility in international oil prices.

“Output growth in Western Africa declined to 3.5 percent in 2023 from 4.0 percent in 2022, weighed down by slow growth performance in Nigeria, the largest economy in the region, which lost pace, decelerating to 2.9 percent in 2023 from 3.3 percent in 2022, largely due to volatility in international oil prices,” it said.

The report stated that nonetheless, a number of countries posted strong growth such as Côte d’Ivoire (6.2 percent), Benin (6.4 percent), and Senegal (4.6 percent), which contributed to moderating the overall effect of the slowdown in Nigeria’s economy.

“In West Africa, key contributors to FDI inflows to the region included Côte d’Ivoire ($1.8 billion), Ghana ($1.3 billion), Nigeria ($1.9 billion), and Senegal (US$2.6 billion),” the report said while adding that West Africa recorded the second highest inflation rate of 20.8 percent, primarily driven by Sierra Leone and Ghana, with their annual inflation averaging 47.7 percent and 39.2 percent, respectively.

It stated that in 2023, the value of intra-African trade reached $190.9 billion, representing an 8.3 percent decrease compared to the impressive 20.6 percent growth registered in 2022.

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“Consequently, the share of intraAfrican trade in total African trade declined to 14.4 percent, from 14.7 percent the year prior. Notwithstanding the overall decline, there were significant disparities across regions and countries.

“At 41.1 percent, Southern Africa recorded the highest share of trade within the continent. West Africa emerged as the second largest intra-African trading region, accounting for 23.4 percent of total intraAfrican trade, while East Africa contributed 16.4 percent.

“North Africa and Central Africa represented 12.3 percent and 6.8 percent, respectively in 2023,” it said.

The report stated that the performance of FDI inflows to Africa masks variations across sub-regions.

“North and West Africa emerged as the largest recipients of foreign direct investments, with each sub-region attracting $13 billion in 2023, even though that amount represents a 12 percent contraction for North Africa, while it is 1 percent contraction for West Africa compared with their performances in 2022.

“In North Africa, FDI inflows were driven by major economies in the sub-region, namely Egypt and Algeria, which recorded FDI inflows of $9.8 billion and $1.2 billion, respectively.

“In West Africa, key contributors to FDI inflows to the region included Côte d’Ivoire ($1.8 billion), Ghana ($1.3 billion), Nigeria ($1.9 billion), and Senegal ($2.6 billion),” the Afreximbank report stated.