Cape Town - The economic forecast for Anglophone West Africa is looking brighter according to analysis by Ecobank’s research team.
It found that Nigeria is at last moving out of recession, Ghana’s growth continues to be strong, and the region’s smaller countries are picking up as they shake off the lingering effects of the Ebola outbreak in 2013 to 2016.
Data for the region shows that Nigeria accounts for an estimated 90% of regional gross domestic product (GDP) and exports mostly crude oil. The outlook for both Nigeria and Ghana, the second key member of the block, is good in 2018, it found.
"Nigeria is improving oil production; Ghana is getting a boost from an expansionary 2018 government budget and rising energy production; Guinea, Liberia and Sierra Leone are on the up as their recovery from the effects of Ebola gathers pace; and the positive political outlook in The Gambia is driving economic prospects," according to Ecobank.
For the bank key factors in the region are:
- Outside oil and gas, Anglophone West Africa is a major producer of soft commodities – cocoa, cashew nuts, natural rubber and wood – both for regional consumption and for export to world markets.
- The region is an important exporter of hard minerals, including gold, diamonds, and manganese, iron and aluminium ores, with Ghana the leading gold producer.
- The region is also a financial hub, having an estimated 39% of Middle Africa’s banking assets in 2015 - mostly in Nigeria. Nigeria and Ghana host two of the largest stock exchanges in Africa, in Lagos and Accra, respectively.
- Nigeria has developed the world’s largest sugar refining complex in Lagos, and has successfully phased out imports of packaged and refined sugar.
Dan Sackey, regional executive for Anglophone West Africa and managing director of Ecobank Ghana, commented that West Africa is coming out of a difficult period where it has faced many challenges like recession, Ebola, and falling oil and other commodity prices. The region is now back on a growth trajectory.
The recovery in commodity prices, notably oil and cocoa, has given a boost to economic growth, especially in Nigeria and Ghana, lifting the entire region. In his view, it is essential that West Africa uses this opportunity to press ahead with the diversification of the economy away from dependence on oil and minerals, with a focus on increasing output and processing of soft commodities, improving logistics and using the region’s financial and stock market leadership.
"Provided West Africa’s governments can maintain fiscal discipline, the growth outlook is very positive," he said.
* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER