•Says regional body has 142.3 million working poor people
Nigeria’s share of the Gross Domestic Product (GDP) of the Economic Community of West African States (ECOWAS) grew to 62.7 per in 2022.
This was revealed in the 2023 West Africa Development Outlook (WADO) released on Monday by the ECOWAS Bank for Investment and Development (EBID).
The report also revealed that poverty worsened in West Africa in 2022, as the number of the working poor increased by 3.9 per cent (5.4 million persons) to 142.3 million persons in 2022.
The theme of the report was, “A Mixed Bag Outlook: Debt Distress, Flagging Growth and Declining Inflation.”
According to the report, “Nigeria increased its share of the sub-regional GDP to 62.7 per cent in 2022 from 60.6 per cent in 2021 at the expense of Côte d’Ivoire, Ghana and the rest of ECOWAS, with Ghana being the biggest loser from 10.9 per cent in 2021 to 9.6 per cent in 2022).
“Ghana’s loss is attributable mainly to a weak growth in economic activity and a weak domestic currency, which fuelled an inflation spiral.”
It added: “Furthermore, Nigeria, which accounts for approximately 62.7 per cent of the sub-region’s nominal GDP recorded back-to-back growth in 2022, after its economy plunged into negative territory in 2020.”
The report, however, added that, “on a more positive note, no ECOWAS Member State recorded a negative growth in 2022, in spite of the very turbulent socio-economic environment.”
It added that, “Liberia continued on a path of positive growth, which began in 2021, after two consecutive years of economic downturn while five countries, Mali, Niger, Togo, Cabo Verde and The Gambia, recorded superior growth in 2022, compared to 2021, with Guinea maintaining its 2021 growth in 2022.”
Furthermore, the report stated that the, “high cost of living and the attendant decline in real incomes also led to an increase in the size of the working poor across the West African sub-region.”
It also stated that, “the size of the working poor increased by 3.9 per cent (5.4 million persons) to 142.3 million persons in 2022. Niger (4.9 per cent) recorded the highest increase, with Ghana (2.8 per cent) recording the lowest increase in the size of the working poor.
“The projected low sub-regional GDP growth for 2023 and the still elevated price levels are expected to lead to a further deterioration in the size of the working poor and overall poverty.”
Commenting further on the rising poverty in the West African sub-region, the report noted that “the escalating debt situation notwithstanding, poverty has remained endemic.
“This is partly because the socio-economic shocks of the times have led to a worsening of the unemployment situation in the sub-region, with most countries experiencing an increase in the rate of unemployment in 2020, 2021 and 2022. Average unemployment across the sub-region stood at 4.32 per cent at the end of 2022.
“The International Labour Organisation (ILO) forecasts that the situation will worsen in 2023, as countries work towards navigating the rather harsh socio-economic challenges. Average unemployment across the sub-region is projected to increase marginally to 4.42 per cent in 2023.”
The report also submitted that the sub-region would continue to experience a slowing but still high inflation in 2023, which would pose a monetary policy dilemma to fiscal and monetary authorities.
The President of the EBID, Dr. George Agyekum Donkor, stated that the theme of the 2023 edition of the West African Development Outlook, which was “A Mixed Bag Outlook: Debt Distress, Flagging Growth and Declining Inflation,” underscored the mixed fortunes that would confront the West African economy in 2023.
Donkor said member states would, “face increased fiscal pressures as inflation remains elevated and growth stutters, indicating that revenue generation could continue to suffer.
“The financial markets offer near-prohibitive rates, imposing medium-to-long-term fiscal costs on the fiscal authority and constraining the growth in overall economic activity. The slowdown in the growth in economic activity will lead to job losses and increased poverty.
“Against this backdrop, there is the need for a conscious effort towards addressing the challenges that affect the macroeconomic fundamentals of the sub-region, while mitigating the impact of macroeconomic misalignments on the most vulnerable in society.
“There is a greater need for fiscal consolidation, as a way of narrowing deficits and keeping the rise in public debt in check. There is also the need to emphasise intra-regional trade, one based on local currencies, as a way of improving the commonality of shocks in the sub-region and reducing the pressure on the current account balance and the reserves position.”