The African Development Bank (AfDB) has projected a positive economic outlook for Ghana and its neighboring West African countries, expecting them to show a positive economic growth by the end of 2023, despite slow growth last year.
AfDB noted that West Africa’s average Gross Domestic Product (GDP) growth decelerated to 3.8 per cent in 2022 from 4.4 per cent in 2021, implying that growth recovery from the 2020 downturn has slowed.
However, the Bank in its recent economic outlook on the region said that “The GDP growth outlook for the region is positive. It is projected to slightly pick up in the medium term (3.9 per cent in 2023 and 4.2 per cent in 2024)”.
However, this growth is on the assumption that global inflation would recede in the medium term. It further explained that household consumption and investment as well as an upturn in activities in emerging economies such as China would be demand side drivers, with agriculture, industry, and services, being the supply side drivers of growth in the region.
The report, which was launched by the bank was on the theme: “Mobilising private sector financing for climate change and green growth in Africa.”
The Report On Climate Change
On climate change, the report indicated that out of the 15 countries that make up the West African region, four were ranked among the 10 most vulnerable countries to climate change and environmental hazards in the world. The four countries are Guinea-Bissau, Mali, Liberia, and Niger.
“As the world faces the urgent challenge of climate change and the depletion of its natural resources, there is a growing imperative for businesses and governments to act toward sustainable and green growth,” the report stated.
It noted that the region has enormous potential to achieve green growth and industrialisation by harnessing natural capital [which was $6.2 trillion in 2018] as a complementary financing option for climate and green growth.
Some areas of focus in that regard included the utilisation of optimal fiscal instruments to maximize resource rents, controlling illegal, unreported, and unregulated fishing and curbing the high rate of deforestation.
Others were, building robust negotiation capacity and expertise, building transparent and accountable institutions to govern resources and guarding against corruption, illicit trade, and illicit financial flows.
Speaking during the launch, Professor Kevin Urama, Vice President for Economic Governance and Knowledge Management, AfDB said that multiple challenges had led to rising interest rates and were compounding debt service payments to African countries.
Those challenges included climate change, inflation driven by higher prices of energy, commodities, and disruption of supply chains, as well as the tightening of monetary policy in the United States and Europe.
Prof Urama, who also is the Chief Economist of the Bank, said that “greater effort will be needed in Africa to mobilise domestic resources and private sector financing to help countries achieve climate and green growth transitions”.
“Africa is being short-changed [in] climate financing. The continent will need between $235 billion and $250 billion annually through 2030 to meet investments under its nationally determined contributions. Yet, Africa received only about $29.5 billion in climate financing between 2019 and 2020.”Prof Urama
The report assessed the economic performance of 15 West African countries, namely: Benin, Burkina Faso, Cabo Verde, Côte d’Ivoire, The Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo.