…Says Diversification, Human Capital Development Will Reduce Economic Disparities In Nigeria, Others
The President of the ECOWAS Commission Dr. Omar Alieu Touray has officially received the first edition of the ECOWAS Regional Economic Outlook for 2025.
The theme of this edition is “Review of Regional Economic Dynamics in the Face of Political Instability and Security Threats”, an analysis of the current economic challenges and opportunities facing ECOWAS member states.
The report examines the importance of peace and stability as drivers of development, in line with ECOWAS Vision 2050 for a prosperous and peaceful region. It identified a gap in the organization’s progress towards achieving SDG 16 (Peace, Justice and Strong Institutions) by 2030, with mixed progress.
The report recommended reforming the Additional Protocol on Democracy and Governance, strengthening collaboration with the African Union and the UN, and mobilizing resources for its Standby Force.
The Outlook concludes that the global environment is impacting the region’s economic prospects and highlights the need to reduce economic disparities through diversification and human capital development.
Strategic recommendations include the coordination of macroeconomic policies for harmonious development, regional financial integration and reform of security architecture. These actions are aimed at strengthening security and realizing Pillar 1 of ECOWAS Vision 2050.
The Report also highlighted the global economic slowdown caused by the COVID-19 pandemic and the Russia-Ukraine conflict, resulting in high inflation and a contraction of global growth to 1.7 per cent in 2023.
According to the Report, the ECOWAS region proved resilient, with moderate growth of 3.9 per cent in 2023. However, global inflationary pressures have affected the zone, particularly in low-income countries, where food and energy prices have risen sharply.
It also focuses on ECOWAS’ economic performance and prospects from 2010 to 2022. Member states’ economies have been marked by fluctuating growth, impacted by health crises such as Ebola and the COVID-19 pandemic, as well as economic shocks such as falling oil prices.
After growing by 5.2 per cent in 2011, the rate fell to -0.6 per cent in 2016, before rising slightly to 3.9 per cent in 2022, indicating a post-COVID-19 recovery.
During this period, inflation remained high, reaching 17.3 per cent in 2022 due to the depreciation of national currencies, rising food prices and the lingering effects of COVID-19.
ECOWAS public finances have also been put to the test, with the regional budget deficit rising from -4.5 per cent in 2010 to -5.6 per cent in 2022. This increase is linked to the burden of debt servicing and additional expenditure to cope with COVID-19.
In terms of outlook, regional GDP is expected to reach 4.1 per cent, supported by growth in certain countries (Benin, Côte d’Ivoire, Senegal).
However, the risks associated with political instability in several countries, coups d’état and sanctions could affect this forecast.
Inflation is set to fall gradually, from 18.8 per cent in 2023 to 11.9 per cent in 2025, although some states, such as Ghana, are likely to continue to experience high inflation.
Global geopolitical tensions, notably the Russia-Ukraine conflict, could intensify inflationary pressures by raising energy and food prices. In addition, climate vulnerability in the region could exacerbate extreme poverty, adding to the social and economic challenges.
Growth projections remain uneven across countries, with high rates in the UEMOA zone and difficulties in the WAMZ, particularly for Nigeria and Ghana, faced with restrictive monetary policies and energy challenges. Economic diversification, particularly in agriculture and infrastructure, could help stabilize commodity prices in the long term, while promoting resilience to external shocks.
The Report also addressed the challenges of peace, security and stability, key elements for the socio-economic development of the region, aligned with Pillar 1 of Vision 2050 entitled “Peace, Security and Stability”.
Although peace and security are strategic objectives, ECOWAS said it is facing increasing difficulties due to recurrent conflicts and coups d’état, particularly since 2021 in Mali, Guinea, Burkina Faso and Niger.
It added that this political instability reflects worrying democratic shortcomings and increases security threats.
ECOWAS Economic Report Predicts Drop In Regional Inflation From 18.8% To 11.9% is first published on The Whistler Newspaper
Source: The Whistler
