From a projected growth of 4% in 2020, the economy of the West Africa sub-region is now expected to contract by 2%; according to the revised African Economic Outlook published by the African Development Bank (AfDB) on July 3.
The virtual launch of the report was jointly hosted by the Bank’s Regional Development and Business Delivery Office for West Africa, the Nigeria Country Office and the Country Economics Department.
It was officially launched by Ghana’s Minister of Finance Ken Ofori-Atta, accompanied by other ministers of finance from the region, including Nigeria’s Federal Minister of Finance, Budget and National Planning, Zainab Shamsuna Ahmed.
Due to the pandemic, growth in the West Africa region, which was poised to expand by 4% in 2020, following growth of 3.6% in 2019, is now projected to contract by 2% in 2020, and could fall by as much as 4.3% in a worst-case scenario.
Countries that depend on oil and tourism for foreign exchange and fiscal revenues, according to the report, will especially face reduced fiscal space and heightened external account imbalances, stoking a build-up of public debt.
While launching the report, Ofori-Atta, noted that “the economic impacts of the pandemic imply the need for economies of the region to begin considering post-COVID-19 strategies with focus on building resilience in strategic sectors and accelerating regional integration.”
“Nigeria is working with partners like the African Development Bank on economic measures to minimize the adverse effects of COVID-19,” Minister Shamsuna added.
Marie-Laure Akin-Olugbade, Director General, Regional Development and Business Delivery Office for West Africa said the region’s young population offered an opportunity to help speed up economic recovery.
“West Africa is endowed with a burgeoning youth population that can strategically be harnessed for employment and economic growth. However, the labor force participation rate for the working population has consistently declined since the beginning of the millennium from 64.2% in 2000 to 58.5% in 2019. This report proffers policy recommendations to address this decline and begin to reverse current trends,” Olugbade said.
This year’s report highlights developments in the region with particular emphasis on “Skills Development and Education for the Workforce of the Future,” and also investigates the impact of the COVID-19 pandemic on the region.
According to the report, a low ranking in the human capital index – which measures the mobilization of the economic potential of citizens – has implications for the region’s capability to embrace the Fourth Industrial Revolution (4IR).
Although West African countries have made improvements in school enrolment over the last two decades, retention rates remain low with outcomes in science, technology, engineering and mathematics especially poor. Yet demand for these skills is increasing and will define the future of work in view of the unfolding technological revolution.
The report points to policies needed to improve skills to empower the West African labour force. These include accelerating improvements in digital infrastructure to meet the increasing demand for digital services; creating incentives for private sector investment in skills development; and scaling up public expenditure in education to enhance skills of the region’s labor market.
Ebrima Faal, the Bank’s Senior Director in the Nigeria Country Department said, “Partnering with global technology companies can also create avenues for research and development to boost skills development for the future.”
As regards COVID-19, the report urged countries in the region to bolster their health care systems and increase funding to train and equip frontline health workers. “Importantly, enhancing healthcare preparedness and building early surveillance and preventive mechanisms is crucial in saving lives. A coordinated regional approach may be more effective than fragmented country level interventions to avoid the spread of infections across borders,” the report noted.
The findings and policy suggestions contained in the Regional Economic Outlook offer robust options for policy makers at both the national and sub-regional levels to confront the challenges of sustainable economic development through skills development for the future of work in the post-COVID 19 era.