The economies of Ghana and Nigeria are poised to see the slowest economic growth in 2024 when compared to their peers in the West African region.
Overall, the West African region is expected to grow by 0.8% to 4.0% this year and 4.4% in 2025 according to the AfDB macro-economic performance outlook for 2024.
The African Development bank stated that aside Nigeria and Ghana, every other country in the sub-region is estimated to grow by at least 4% in 2024 with embattled Niger leading the pack at 11.2% followed by Senegal and Ivory Coast at 8.2% and 6.8% respectively.
- It stated, “except for Nigeria and Ghana, all countries in the region are projected to grow at least 4 percent in 2024”
2024 economic forecast for Nigeria
The bank’s forecast for Nigeria anticipates a growth rate of 2.9% in 2024, improving to 3.7% by 2025. This modest growth trajectory is primarily linked to the repercussions of recent policy reforms, including the elimination of fuel subsidies and the efforts to consolidate the foreign exchange markets.
These measures, while aimed at stabilizing the economy, have temporarily exacerbated the cost of living, suppressing both consumer spending and investment.
Despite these challenges, the report suggests that the strategic redirection of resources—specifically, the $5 billion formerly allocated to fuel subsidies between 2022 and May 2023—towards vital social infrastructure, holds the promise of yielding significant long-term benefits over the immediate discomforts.
Ghana’s economic projections for 2024
In contrast, Ghana’s economic growth is expected to slightly pick up to 2.8% in 2024, from a sluggish 1.5% in 2023. The analysis attributes this slow pace to persistent inflationary pressures that continue to strain household budgets, implying that inflation remains a critical barrier to Ghana’s economic revival and growth prospects.
Ghana and Nigeria- pseudo-rivals with similar economic tales
Ghana grappled with an unprecedented economic downturn in 2023, marked by a staggering inflation rate that peaked at over 50%. However, recent reports as of indicate a significant easing of inflation to 23.4%. The Ghanaian currency, the Cedi, also faced a steep devaluation of over 11% in the first half of 2023
- The country’s economic challenges began in December 2022 when it announced a suspension of payments on a major chunk of its $28.4 billion external debt, essentially defaulting.
- However, Ghana secured a $3 billion deal with the International Monetary Fund (IMF), offering a glimmer of hope amidst its financial turmoil.
- Like its counterpart in West Africa, Nigeria’s economic problems started with the currency redesign fiasco followed by the twin reforms of then newly elected President Tinubu- fuel subsidy removal and unification of the foreign exchange market.
- These policies pushed inflation to a 27year high as of December 2023 at 28.92% mainly propelled by rising cost of food and transport. Also, Nigerians have seen their currency depreciate by over 100% since the unification of the forex market in June and the resultant devaluation by the CBN.
