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The Economic Community of West African States (ECOWAS) boasts of some of Africa's largest economies, but like many economies of the world, the 15 member states of ECOWAS are facing both endemic and global challenges that could undermine the region’s economic growth in in 2023.
While two years ago in 2020, before the global pandemic struck, a majority of ECOWAS countries were enjoying the commodity boom with the region’s three of its largest economies - Nigeria, Ghana, and Côte d’Ivoire - accounting for one-fourth of Africa’s GDP.
Unfortunately, short of a change in the global economic projection, it will be a challenge for these West African countries to replicate the pre-pandemic growth. The global economic forecast paints a depressed economy in2023 and at best sluggish growth for more diversified economies, spilling over from the after math of the pandemic, the ongoing Russia-Ukraine war and widespread inflation.
A global analysis released
Africa is huge continent with untapped potential. With the rest of the world opening up for the best international trade and travel relations, Africa is learning and following the same path, with countries such as Uganda, Kenya and Rwanda easing entry restrictions by issuing visa on arrival and hence turning themselves towards open borders opportunities as members of the East African Community (EAC).
Unrestricted movement of people and goods between African countries holds the key to unlocking this trade potential. That is why trade analysts are touting the African Continent Free Trade Area (AfCTA) as a game changer in inter-Africa trade.
According to United Nations Conference on Trade and Development (UNCTAD), Intra-African trade is currently low at 14.4 percent of total African exports. UNCTAD estimates that the AfCFTA could boost intra-African trade by about 33 percent and cut the continent’s trade deficit by 51 percent.
The possibility of more open
- By 2050, a quarter of the world’s population (25%) will be in Africa
- Africa Investment Forum (AIF) raises US $31 billion in investment deals
- Only 33 of Africa’s 51 countries have signed the single passport protocol and only four have ratified it
Come 2050, a quarter of the world’s population (25%) will be in Africa, that in itself is a good enough reason to invest in Africa and for Africa to invest in education and workforce skill upgrade.
In fact, according to the African Development Bank (AfDB), there are two other factors that beg for increased investment in Africa. First the fact that Africa holds 65% of the world’s virgin arable land and second, Africa, by far, hosts the world’s biggest known sources of renewable energy.
As AfDB President Akinwumi Adesina put it, “the future of Africa lies in investments, not aid.”
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- Organic agriculture is the use of green manure, compost, biological agriculture, and biological fertilizers derived from animal waste.
- To promote the organic sector in Africa, countries should implement the African Heads of States Decision EX.CL/Dec.621(XVII) on Organic Farming which was made following the report of the Conference of Ministers of Agriculture held in Lilongwe, Malawi in 2010.
- The organic farming market size is expected to grow from $150.63 billion in 2021 to $169.04 billion in 2022 at a compound annual growth rate (CAGR) of 12.2%.
In addition to existing agricultural challenges, pandemics and wars such as the Covid-19 pandemic and the Russia-Ukraine war created issues such as the increase in prices of fuel, food commodities, and particularly agrochemical input.
A shortage of chemical fertilizer, is driving up food costs and creating a crisis for countries in Africa and has many farmers desperate and looking for alternatives. According to The Conversation …
Every African region has felt the effects of Russia’s invasion of Ukraine, with West Africa also bearing the burden of a war miles away in Europe.
- At a period when West Africa has been facing a severe food crisis since 2011, the Ukraine conflict has complicated matters further.
- For most West African nations, the expenses of regulating rising prices are already too high.
- The West African economic crisis and the Russia-Ukraine scenario highlight the perilous linkages between diplomatic sanctions, commerce, and food security.
Africa's post-Covid recovery hampered
The Russian-Ukrainian conflict has hampered Africa's potential recovery from the COVID-19 pandemic by raising food and fuel costs, interrupting the trade of services and goods, constricting fiscal space, limiting green transitions, and slowing the flow of development funding across the continent.
The crisis has jeopardized homes, communities, and nations across Africa. Before 2020, African countries were among the world's fastest-growing. The COVID-19 pandemic…
The European Union (EU) and Nigeria have enjoyed robust trade and bilateral relations since the formulation of this lucrative partnership, and remains its most important trading partner for oil and non-oil exports. In cognizance of Nigeria’s strategic importance as Africa’s most populous nation, and one of the largest economies; the EU’s cooperation with the country aims to enhance growth and stability to achieve social equity, hence their partnership has been rooted in shared values and interests since inception. In addition, Nigeria is also a key beneficiary of the EU’s Foreign Direct Investment (FDI).
To boot, the EU has recently renewed its commitment, pledging to continue to pursue with increased vigour, its bilateral engagement and friendship with Nigeria I n order to deliver better and to make the partnership more fruitful. This comes after the trade volume between the European Union and Nigeria, increased by 25.8 per cent to peak at…
- It is not easy to create a common currency since it needs the creation of a central monetary system for several nations
- The AU and ECOWAS should reconsider their approach—a common physical currency—and move their attention to building a common digital currency, as the EU is doing
- With the establishment of the Pan-African Payment and Settlement System (PAPSS), which allows for the simple conversion of numerous African currencies, some progress—or maybe too little—has been achieved
- When turned into digital money, Africa’s weak currencies have little chance against stablecoins backed by the US dollar
It is not easy to create a common currency and it would need the creation of a central monetary system for several nations.
This is a regime that, given the diverse economic demands of countries, may be judged undesirable for some member states. Africa’s desire for economic and monetary integration dates back many years.
The main objective of the bloc is to promote economic interdependence and cooperation among member states to raise the living standards and encourage economic development.
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The construction of the Lagos-Abidjan Highway has the capacity to unlock 85 per cent of trade within the ECOWAS sub-region according to the African Development Bank (AfDB).
The Highway which is 1,028-km project will span across different countries which includes Cote d’Ivoire, Ghana, Togo, Benin and Nigeria -and traverse the economic capitals of the five coastal countries, starting from Abidjan and ending in Lagos, while equally straddling eight border crossings.
Lamin Barrow the Director-General of AfDB who represented Akinwumi Adesina the AfDB President appearing on Tuesday as a panelist at a one-day webinar to showcase the investment opportunities from the Federal Government of Nigeria’s reforms and privatization activities, said that while the Federal Government had spearheaded various reforms in the banking sector that enhanced the resilience of the financial system, there was a need to stay the course in completing the bold reforms initiated to restructure the energy sector.