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Insight & Analysis - October 3, 2022

10 Largest Economies in West Africa

Most economies in West Africa have experienced a surge in growth since the early 1990s. 

Their total GDP increased from $105 billion in 2000 to more than $659 billion in 2020. In the same year the three largest economies in West Africa—Nigeria, Ghana, and Côte d’Ivoire—accounted for one-fourth of the continent’s GDP.

But there is a tremendous gap in West Africa, with some of the world’s poorest countries including Sierra Leone, Guinea-Bissau, and Liberia.

Additionally, there are widening gaps between the rich and the poor in many West African economies, especially when it comes to access to amenities like health, water, and education. Let’s examine ten of West Africa’s largest economies.

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1. Nigeria

Nigeria is Africa’s largest economy. In 2020, it made up the biggest portion of any nation’s GDP, 18.3% of all of Africa.

Nigeria is now the most populated country in Africa, and by 2050, it’s projected to surpass the US and reach 400 million citizens.

Nigeria nevertheless suffers severe economic difficulties. Its economy is primarily dependent on the oil and gas sector, which generates more than 80% of government revenue and 90% of all exports.

Nigeria is the largest producer of crude oil in Africa and ranks sixth globally, producing an average of 2.5 million barrels per day.

2. Cape Verde

Since the early 1990s, the island nation of Cape Verde has maintained a stable democracy, and it is still one of the most industrialised and democratic nations in  Africa.

The country has a vibrant, service-based economy that is centered on business, trade, transportation, and public services despite having little natural resources.

A significant industry that supports both direct and indirect employment for many locals is tourism. This is perhaps the reason Cabo Verde was one of the West African nations that was affected the most after COVID. In the year between 2019 and 2020, its GDP shrank by 14%.

3. Ghana 

In 2020, Ghana had the second-largest GDP in all of West Africa. Additionally, efforts have been made to diversify the economy into industries like industrial minerals, automobile and shipbuilding, digital technology products, and hydrocarbons.

Ghana is not reliant on any particular good despite having a wealth of natural resources, including cocoa. In addition, a GDP rebasement helped Ghana’s economy grow at the quickest rate in the world in 2011.

4. Côte d’Ivoire

With a compound annual growth rate (CAGR) of 9.21% between 2011 and 2020, Côte d’Ivoire has the highest GDP growth among West African nations.

Following the resolution of the political crisis in 2011, Côte d’Ivoire’s economy quickly recovered, reaching a record-breaking $61 billion in 2020.

The 2016-2020 National Development Plan is one of the strategies the government has developed to promote transparency and draw in business.

It was put into place to create substantial infrastructure projects that were led by the private sector.

5. Sierra Leone

Sierra Leone’s GDP has been expanding gradually since the end of its civil war, with a CAGR of 6.1% between 2002 and 2020.

The economy is mostly dependent on the extraction of minerals, and it can be said that it is a “rentier state,” with the majority of its national revenues coming from the rent paid by people or governments from other countries.

6. Gambia 

Since 2014, the Gambia’s GDP has been continuously rising. The nation’s 2.9% population increase in 2020 was the greatest in West Africa, which can be ascribed to a fast declining death rate.

Gambia’s economy is primarily dependent on agriculture, which accounts for 78.6% of employment and 20% of GDP.

Additionally, the nation depends heavily on outside assistance. The IMF Executive Board gave the Gambia $14.4 million in May 2021 to aid in its post-COVID-19 economic recovery.

7. Guinea

One of the few nations in West Africa to have economic growth after the Covid-19 pandemic was Guinea. From $13.5 billion in 2019 to $15.7 billion in 2020, its GDP grew by 16%.

This is related to the mining sector’s significant 18.4% growth in 2020 and China’s rising need for bauxite and aluminium, both of which Guinea is a key source.

8. Benin

In West Africa, Benin has the lowest unemployment rate. It stayed around to 1.5% for the majority of the 1990s, dropped to below 1% in 2000, and then increased to 2.65% in 2011.

For the remainder of the 2010s, it stayed close to 2.5%, rising to 2.54% in 2020.

Despite Benin having a very low unemployment rate, underemployment is a serious issue, especially for young people.

Because the few occupations that are available do not fit their skill set, are part-time, or leave the worker idle, underemployment occurs when people are underutilised.

Women also make up the majority of workers in the unorganised sector, where their labour is neither valued or appropriately compensated.

9. Burkina Faso

Landlocked Burkina Faso has one of the lowest rates of literacy in West Africa at just over 40% and a life expectancy that is lower than the average for the region at 61.6 years.

In comparison to ten years ago, less than half of the population of the country now has access to basic drinking water services. It has a 7.1% tertiary enrollment rate.

In the past, Burkina Faso has experienced frequent droughts and military takeovers.

Since 2015, jihadist groups have begun carrying out more frequent and deadly terrorist strikes throughout the nation. As of July 2021, this has caused 6% of the population to be internally displaced.

10. Liberia

Similar to Liberia, only 27.7% of the population has access to power. It generates 55% of its electricity via hydroelectric power.

Liberia has a lot of hydro, biomass, and solar resources despite the country’s slow progress in developing its clean energy sector.

By 2030, the amount of electricity produced is expected to increase by a factor of roughly ten, reaching 5,000GW.

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