By Chabi Yayi

Gambiaj.com – (COTONOU, Benin) – Economic growth in West Africa is projected to accelerate in the coming years, with the average rate expected to rise from 3.2% in 2023 to 4% in 2024 and 4.4% in 2025, according to the African Development Bank (AfDB). While these figures paint an encouraging picture, they obscure deep-seated socio-economic challenges that hinder equitable development across the region.

Economic growth is traditionally viewed as a key indicator of policy effectiveness, measured by changes in gross domestic product (GDP). It represents the total value created by economic agents over a specific period and is often synonymous with economic vitality. However, recent trends reveal a troubling disconnect between growth and poverty reduction in West Africa.

In six ECOWAS countries—among the continent’s top performers in growth—30% of the population continues to live on less than $1.90 per day. Furthermore, income inequality is stark: the wealthiest 1% in West Africa earn more than the combined income of the rest of the population.

According to the World Bank’s April 2024 Pulse Report, a 1% increase in GDP per capita leads to just a 1% reduction in poverty in the region, compared to a global average of 2.5%. This disparity raises pressing questions about the structure and inclusiveness of West African economies.

One major issue lies in the reliance on raw material exports as a growth driver. This dependence renders West African economies vulnerable to external shocks, as fluctuations in global commodity prices directly affect national economies. Such structural weaknesses underscore the need for diversification to build resilience.

Economic growth often fails to bridge the gap between the rich and the poor. The Lorenz curve, a tool used to visualize income distribution, highlights how growth disproportionately benefits capital over labor income. This phenomenon, thoroughly examined by economist Thomas Piketty, exacerbates inequality, creating economic polarization and social tensions.

To address these challenges, African nations must prioritize inclusive growth. Policymakers should complement traditional economic measures like GDP with indicators such as the Gini coefficient and the Human Development Index (HDI) to capture broader aspects of development.

Tax reform is critical to reducing inequality. By strengthening the progressiveness of income taxes, governments can ensure that the wealthiest contribute more, while reducing reliance on regressive taxes like VAT, which burden the poor disproportionately.

Public funds generated through fair taxation must be strategically invested in education, healthcare, and social protection systems to create equal opportunities for all.

Economic transformation is another essential step. Shifting from an economy dependent on raw material exports to one focused on domestic value addition and consumption is key to reducing external dependence. Protecting nascent industries from premature exposure to global competition is also vital, allowing them to develop and thrive.

Strengthening intra-African trade through initiatives like the African Continental Free Trade Area (AfCFTA) offers immense potential for growth. Currently, only 16% of African trade occurs within the continent, highlighting a significant opportunity to enhance regional economic integration.

The consequences of uneven growth are stark, as illustrated by the experiences of Burkina Faso, Egypt, and Mali.

In Burkina Faso, rapid economic growth of 5–7% between 2010 and 2014, driven by gold and agriculture, failed to quell widespread discontent. This culminated in the 2014 uprising that toppled President Blaise Compaoré.

In Egypt, 6–7% growth in the 2000s masked endemic corruption and inequality, leading to the 2011 revolution. Despite Hosni Mubarak’s removal from power, political unrest persisted, resulting in a military coup in 2013.

In Mali, 5% annual growth in the early 2010s, driven by gold and cotton, exposed regional disparities. The 2012 Azawad rebellion, fueled by demands for autonomy and marginalization, triggered a major political crisis, resulting in a military coup. Instability has continued, with another coup occurring in 2020.

The enduring relevance of Kwame Nkrumah’s words, “All serious humanism must arise from egalitarianism and must lead to policies chosen objectively with the aim of safeguarding and perpetuating egalitarianism,” serves as a rallying cry for action. West Africa must commit to creating a just and prosperous society, as its trajectory will significantly influence global stability by 2050.

Inclusive growth is not just a policy goal; it is a necessity for sustainable development. By addressing structural inequalities, fostering economic diversification, and investing in human capital, Africa can offer future generations a brighter and more equitable future.

About the Author
Chabi Yayi holds a Master’s degree in Innovation and Entrepreneurship Sciences from HEC Paris and a Bachelor’s degree in Economic Sciences from the University of Montreal. Combining academic expertise with civic engagement, Chabi is committed to addressing Africa’s development challenges.