Truly, the West African sub-region has moved forward these last few years despite a competitive international environment. This change can be attributed to thriving petroleum products, the rise of the tertiary sector, and economic progress in certain post-conflict countries. However, key growth areas such as macroeconomic stability, employment, structural change, and poverty reduction are still lacking. The strong linkage between macroeconomic stability and economic performance shows the need in West Africa to deepen structural reforms and diversify the economic base of several countries, particularly those dependent on commodities. Identifying the development issues that face the sub-region signifies a step closer to tackling and overcoming these limitations. Here are the Top 5 Macroeconomic and development issues facing West Africa:
Underinvestment in Infrastructure
West African countries are largely infrastructure deficient. This lack of physical infrastructure is one of the greatest hindrances to productivity in the region. According to the African Development Bank, an estimated $130- to $170 billion needs to be invested each year on Africa’s infrastructure. Unfortunately, there is still a financing gap of as much as $108 billion. Good roads, telecommunications, water, electricity are some of the most neglected development factors in West Africa. Hence posing a major risk to businesses and foreign investments in the area.
Unemployment and Underemployment
As is the norm in Africa, the potential of the youth population remains largely untapped. Unemployment, underemployment, informality, job precariousness and income inequality plague the labour market. The largely unemployed youth populations rely on informal trade, services, and manufacturing to earn a living. According to the World Economic Forum’s 2018 Executive Opinion Survey, African Business leaders have expressed this issue as their most pressing concern. This is because unaddressed youth quandaries are chief catalysts for instability. Policy reforms should address youth unemployment across sectors, including education, to equip youth with skills for employment.
Debts and Fiscal crises
The concurrent relationship between external debt and increasing global commodity prices is highly unfavourable for West Africa. Most West African countries are at risk of slipping into a major debt crisis, according to the Brookings Institution. As debt levels increase, so does the pressure of servicing the debt; money that could be invested in society goes to repaying loans. Hence, posing a significant setback in achieving future development targets. The region needs to better mobilize domestic revenue by reforming its revenue authorities. This will enable shrewd sourcing, managing and repayment of foreign credit.
Failing Public Sector
The recent increase in leadership changes demonstrates the region-wide demand for greater accountability and democracy. However, the recurring failure in governance at various national levels defeats the hopes for improved security, public sector institutions and public finance management. The inexistence of efficient, well managed public sectors impedes private sector investment, living standards. Correspondingly, dysfunctional public sectors breed a lack of confidence in the region’s economic growth. Institution building, regulatory frameworks, discipline in public offices are considered of utmost importance in restoring West Africa’s Public sector.
According to the World Economic Forum, Africa is expected to be one of the hardest hit continents by climate change. West Africa has several vulnerable and densely populated coastal cities including Accra, Dakar and Lagos. The sub-region is already shaken by recurring food crises, a situation that has lasted for several decades. The effects of climate change via Food insecurity tends to worsen from year to year. Soon, energy deficits and mass migration would follow, having debilitating effects on the sub-region’s development.