Socio-economic Profile of West Africa in 2014 and Prospects for 2015

May 2015

Maison des Nations Unies, 428 Avenue du Fleuve Niger; P.O. Box 744 Niamey, Niger

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ECA-WA/NREC/2015/01

Original text: French

Socio-economic Profile of West Africa in 2014 and Prospects for 2015

May 2015

iii

Table of Contents

Acronyms and abbreviations .................................................................................................................... vii

Acknowledgements ................................................................................................................................. viii

Foreword ................................................................................................................................................... ix

Executive summary ..................................................................................................................................... x

Introduction ..................................................................................................................................................1

1. International environment ................................................................................................................2

1.1 Global context .......................................................................................................................... 21.2 Recent developments and prospects in Africa ........................................................................... 4

1.2.1 Economic situation in 2014 ............................................................................................. 41.2.2 Prospects for Africa in 2015 ............................................................................................ 7

II. Regionaleconomicprofileovertheperiod2013–2014andprospectsfor2015 .............................8

2.1 Economic situation ................................................................................................................... 82.1.1Economicgrowth ........................................................................................................... 82.1.2Inflation .......................................................................................................................... 102.1.3Publicfinances .............................................................................................................. 112.1.4 Monetary situation ........................................................................................................ 142.1.5 External Account ........................................................................................................... 15

2.2 Macroeconomic Convergences Status ..................................................................................... 172.3EconomicprospectsforECOWAScountriesin2015 ................................................................ 202.4. Risk analysis ............................................................................................................................. 21

III. SocialsituationandyouthemploymentissuesinWestAfrica ..........................................................24

3.1Socialsituation ......................................................................................................................... 243.2LabourmarketandsocialexclusionofyoungpeopleinWestAfrica .......................................... 25

3.2.1MappingofthesituationofyoungpeopleonthelabourmarketinWestAfrica .............. 253.2.2FactorscontributingtoyouthexclusiononthelabourmarketinWestAfrica .................. 273.2.3Consequencesoftheexclusionofyoungpeoplefromthelabourmarket......................... 303.2.4 Actionstofacilitatetheintegrationofyoungpeopleintothelabourmarket ................... 31

IV. Conclusion and Recommendations ..................................................................................................34

V. References .......................................................................................................................................36

Appendix: ...................................................................................................................................................38

A. Economic situation on country basis in 2014 .............................................................................. 38B.Tablesandgraphs ........................................................................................................................ 46

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List of Figures

Figure1:WorldEconomicOutlook(inpercentagechange) .......................................................................3

Figure2:RecenttrendineconomicgrowthinAfrica ..................................................................................5

Figure3:RecentinflationarytrendinAfrica ................................................................................................6

Figure4:RealGDPGrowth ..........................................................................................................................9

Figure5:Consumerprices(Annualaverage,percentagechange) ...............................................................11

Figure6:Overallfiscalbalance,excludinggrants .....................................................................................13

Figure7:Currentaccountbalanceexcludinggrants(asapercentageofGDP) ...........................................16

Figure8:FDIflowsin2013(inmillionsof$US) ........................................................................................16

Figure9:NumberofcountriesthathavemettheconvergencecriteriainECOWAS .................................18

Figure10:PerformanceofECOWAScountriesintermsofcompliancewithprimarycriteria ......................19

Figure11:PerformanceofECOWAScountriesintermsofcompliancewithsecondarycriteria .................19

Figure12:Totalnumberofconvergencecriteriaachievedpercountry ......................................................20

Figure13:Gapbetweenthehighestandthelowestscoreintermsofbusinessclimatein2015 ..................21

Figure14:Averagescoreforeffectivegovernance(MoIbrahimIndex)byregion,2014 ..............................22

Figure15:AveragescoreofthehumandevelopmentindexinWestAfricacomparedto otherregions,2014 ....................................................................................................................22

Figure16:BusinessclimateinWestAfricacomparedwithothercountries ...............................................49

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List of Boxes

Box1:ChangeinthebaseyearforGDPcalculationinNigeria:Amorerealisticpictureof theNigerianeconomy .................................................................................................................10

Box 2 : Economic Impacts of Ebola on Africa .........................................................................................17

Box3:Senegal,acountrywithinsufficientemploymentcapacityintheprivatesector ..............................28

Box 4 :Relationshipbetweenyouthunemploymentandpoliticalinstabilityinfragilestates ......................30

List of Tables

Table1:CorruptionPerceptionsIndexinWestAfrica..................................................................................23

Table2:SalariedemploymentandunstableemploymentamongyoungpeopleinWestAfrica .................26

Table3:IncidenceofpovertyamongyoungpeopleinWestAfrica ............................................................31

Table4:RealGDPGrowth ........................................................................................................................46

Table5:Consumerprices(Endofperiod,percentagechange) ....................................................................46

Table6:Overallfiscalbalanceexcludinggrants(AspercentageofGDP) ....................................................47

Table7:MoIbrahimIndex .........................................................................................................................47

Table 8: Human Development Index ..........................................................................................................48

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Acronyms and abbreviations

WAMA: WestAfricaMonetaryAgencyAfDB: African Development Bank BCEAO: BanqueCentraledesEtatsdel’Afriquedel’OuestUNECA/SRO-WA:UnitedNationsEconomicCommissionforAfrica/SubRegionalOfficeforWestAfricaECOWAS: EconomicCommunityofWestAfricanStatesIMF: International Monetary Fund WEO: WorldEconomicOutlookOECD OrganisationforEconomicCooperationandDevelopmentGDP: Gross Domestic ProductHIPC: Heavily Indebted Poor Country UNDP UnitedNationsDevelopmentProgrammeUEMOA: WestAfricaEconomicandMonetaryUnionUN-DESA UnitedNations-DepartmentofEconomicandSocialAffairsWAMZ: WestAfricaMonetaryZone

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Acknowledgements

ThisreportwascompiledunderthegeneralsupervisionofMr.DimitriSanga,theDirectoroftheSubregionalOfficeforWestAfricaoftheEconomicCommissionforAfrica(ECA/SRO–WA)andthecoordinationofMr.AmadouDiouf,theOfficerinchargeofEconomicAffairsandActingHeadoftheSub-regionalDataCentre.

The final drafting team includesMessrs Joseph Foumbi, Jean LucMastaki, Florent Melesse, Privat DenisAkochaye,ZachariasZiegelhofer,OumarSissoko,KazimLamineDakori,JérômeOuedraogo,InnocentBle-dou and Harcel Nana Tomen.

MembersofthedraftingteamwishexpresstheirgratitudetoallcolleaguesattheECA/SRO–WAfortheircooperationandcontributiontothefinalisationofthisreport.OursincerethanksalsogotoalldelegatesfromMember States,WestAfrican regional organizations, civil society andprivate sector representatives at theEighteenthMeetingoftheIntergovernmentalCommitteeofExpertsforWestAfrica,heldfrom18to19MarchinDakar,Senegal,fortheirrelevantcommentsandcontributionswhichhelpedtoimprovethequalityofthisreport.

Finally,thedraftingteamextendsitsappreciationtotheadministrativesupportteamandallofficialsoftheECA/SRO-WAwhocontributedtothefinalisation,editinganddisseminationofthisreport,especially,JeanBap-tisteEken,AbdoulkaderCheffou,KadidiatouAmadou,BalkissaAllagbada,ZaraSaliandIngoilaMounkaila.

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Foreword

TheSub-regionalOfficeforWestAfricaoftheEconomicCommissionforAfrica(ECA/SRO-WA)organisedfrom18 to 19March 2015 inDakar, Senegal, the statutorymeeting of the IntergovernmentalCommitteeofExperts(ICE)forthe15WestAfricanMemberStates.Deliberationsatthemeetingfocusedonthetheme“Towards a structural transformation of economies in the West African sub-region through infrastructure development”.

ThechoiceofthisthemeflowsfromtheEconomicReportonAfrica2014,compiledbytheECAincollabora-tionwiththeAfricanUnionCommissionandentitled,“DynamicIndustrialPolicyinAfrica:InnovativeInstitu-tions,EffectiveProcessesandFlexibleMechanisms”which,amongotherthings,highlightedthedangersofastrongeconomicgrowthwithout industrialdevelopmentandstructural transformationandcalled for theprovisionofmoderninfrastructureandlogisticsrequiredforindustrialisation.

Besidesthereportdedicatedtothemeforthe18thSessionoftheICE,participantsreviewed,withrespecttotheotherstatutoryreports,thisdocumentonthe“Socio-economic profile of West Africa in 2014 and prospects for 2015”.

ThemainobjectiveofthisreportistoanalysetheeconomicandsocialconditionsinWestAfricancountriesin2014aswellasprospectsfor2015.Morespecifically,thereportaimstoprovideanoverviewoftheinter-nationaleconomicenvironmentandanupdateonthesocialandeconomicsituationintheregionin2014aswellasprospectsfor2015whileidentifyingthechallengesfacingtheregioninordertomaketherelevantrecommendationsforenhancingregionaldevelopmentanddeepeningintegration.Italsogiveshighlightsontheeconomicandsocialprofilein2014foreachofthe15MemberStates.

TheSubregionalOfficecompiledthisreportbasedondataobtainedfromMemberStatesandsubregionalinstitutions,includingECOWAS,WAMA,UEMOAandBCEAOinadditiontoitsowndocumentation.OthersourcessuchastheUnitedNationsDivisionforEconomicandSocialAffairs(UN-DESA),theIMF,WorldBankandAfDBwereusedfordataorinformationthatarenotavailableatthesubregionallevel.

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Executive summary

1. Thecompilationofthe2015ReportontheEconomicandSocialProfileofWestAfricaisaregularactivityoftheSub-RegionalOfficeforWestAfricaoftheEconomicCommissionforAfrica(ECA/SRO-WA)whichaimsatproviding:(i)anoverviewofeconomicandsocialconditionsinWestAfricaandprospectsfor2015atthecountrylevelandtheEconomicCommunityofWestAfricanStates(ECOWAS)levelaswellas(ii)ananalysisofonemajoremergingsocialissueinthesubregion.

2. ThisreportontheeconomicandsocialprofileofWestAfricaissdividedintothreemainparts.

3. Part Iwhichreviewstheinternationalenvironmentpointstoaslightupturninworldeconomicactivityin2014,withagrowthratewhichisexpectedtoreach2.6%against2.5%in2013(UNDESA,2015).Inspiteofthisrecoverytrendatthegloballevel,growthintheEurozoneremainedweakwithagrowthrateestimatedat1.3%in2014against0%in2013.Japanalsoexperiencedadecelerationofitsgrowthrate(0.4%in2014against1.5%in2013).However,theUnitedStatesconsolidatedtheireconomicrecoverywitha2.2%and2.3%riseineconomicactivityin2013and2014respectively.

4. Growth in countries in transition and developing countrieswasmixed. Brazil and Russia recordedgrowthratesof0.3%and0.5%respectivelyduetospecificconstraintsassociatedwithstructuraldeficitsandmacroeconomicmanagement, increasedfinancial risksaswellasgeopolitical tensions. On thecontrary,SouthandEastAsiancountriesmaintainedahighlevelofactivityat5.9%in2014.

5. WithregardtoAfrica,in2014,thegrowthrateisexpectedtostabilizeat3.5%,thesamelevelasin2013.Onsub-regionalbasis,thegrowthtrendwasmixed.WhilstEastAfrica(6.5%),WestAfrica(6.3%)andCentralAfrica(4.3%)recordedgrowthratesabove4%,thoseofSouthernAfrica(2.9%)andNorthAfrica(2.9%)werebelow3%.

6. Overall,inflationwasgenerallycontainedat3%atthegloballevel,however,withcontrastingsituations.IntheEuropeanUnion,thelevelofpricesfellfrom1.5%in2013to0.7%in2014,whilstintheCom-munityofIndependentStates,theaverageincreaseinpricesreached8.1%in2014mainlyasaresultofhighdepreciationofthecurrencyofmostcountriesintheregion.InAfrica,averageinflationwoulddropfrom7.2%to6.9%thankstothecombinedeffectofmoreprudentmonetarypoliciesandamoder-atechangeinimportprices.InEastAsia,theeasingofinflationarypressuresobservedsince2012wasconsolidatedatalevelestimatedat2.4%in2014.ThesametrendwithamorepronounceddeclinewasobservedinSouthAsiawhereinflationwouldfallfrom14.7%in2013to9.2%in2014.InLatinAmericaandtheCaribbean,pressuresonpricewerestrongerin2014,generallyraisinginflationfrom7.2%to10.2%between2013and2014.

7. Asregardscommodityprices,oilpricesweregenerallyonaonadownwardtrendin2014,fallinginNovember2014totheirlowestlevelinfiveyears.Concerningnon-oilcommodityprices,thenominalpriceindexofnon-oilgoodsfellby6%overtheperiodJanuarytoAugust2014onyear-on-yearbasis,reflectingarelativedropinmostcommoditypricesexcludingoil.

8. Regardingworldtrade,thevolumeofimportsandexportsgrewrespectivelyby3.3%and3.5%in2014against2.9%and3.1%in2013.Intermsinternationalcapitalflows,themajordevelopmentremainedtheexpected6%declineinnetprivatecapitalinflowsintoemergingeconomies,whencomparedtothelevel in2013.Onthecurrencymarket, thedominant trendwas thesteadyappreciationof thedollarcomparedtoothermajorreferencecurrencies,theEuro,YenandPoundSterling.

9. ConcerningprospectsforAfricain2015,theaccelerationinthepaceofgrowthisexpectedintheshortterm,withanupturninactivityprojectedat4.6%in2015against3.5%in2014.Inflationwouldreach6.9%in2015,thesamelevelasin2014.Publicdeficitswouldpersistin2015asaresultofrisingcapital

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expenditures,anexpansioninthepublicwagebillandsocialsafetynetprogrammesunderwayinmostcountriesonthecontinent.

10. In spiteof thisoverall favourableglobalenvironment,Africa’seconomymaybeconstrainedbybothinternalandexternalriskfactors.Ontheexternalfront, theeconomiesofoilproducingcountriesarethreatenedbyasteeperfallinoilprices.Also,theslowdownofgrowthinChinaaswellasthesluggishrecoveryintheEurozonecouldalsoadverselyaffectexportvolumesofAfricancountries.Attheinternallevel,eventhoughtheeffectsoftheEbolaepidemicwerelimitedtothethreemostaffectedcountries(Guinea,LiberiaandSierraLeone),thepersistenceofthediseaseorawiderspreadin2015couldaffecttheentireregion,especiallytrade,tourismandtransportsectorsaswellasagriculture,inadditiontoanegative social impact.

11. Part II of the report provides an analysis of the economic situation in the West Africa region.

12. In2014,economic growthwithintheECOWASregionisexpectedtofollowitspositivetrendtostandat6.3%against5.6%in2013(ECOWAS,2015).Thereneweddynamisminregionalactivityisonaccountofthegoodperformancerecordedinmostcountries,withgrowthratesabove6%forsomecountriesintheregion.

13. ThesubregionwasmarkedbyachangeinthebaseyearforcomputingNigeria’sGDPfrom1990to2010.Duetothischange,Nigeria’sGDPnowaccountfor75%ofthesub-region’sGDPagainst60%previously.Thisalsoreflectedatthestructurallevelanincreaseintheshareofthenonpetroleumsectoraswellasasubstantialgrowthintherelativeshareofthetelecommunicationssector.

14. WithintheUEMOAspacewhichaccountfor14.6%ofGDPfortheECOWASregion,economicgrowthwouldrise from5.8%to6.8%between2013and2014.ThissituationstemmedfromanacceleratedeconomicgrowthinallMemberStates,withCoted’Ivoire,thebestperformingeconomyintheregionin2013and2014,expectedtorecorda9%expansioninactivityin2014.

15. IntheWAMZarea,growthprojectionsbeforetheoutbreakoftheEbolaepidemichadtobereviewedforcountriesmostaffectedbythedisease,namelyGuinea,LiberiaandSierraLeone.ThedeclinesinGDPwouldvarybetween2and5percentagepoints.Sincethebeginningoftheepidemicandthesubsequentdownturnineconomicactivity,thethreecountrieshavereviewedseveraltimestheirGDPprojectionsfor2014(ECA,2015).

16. In 2014, the level of inflation(7.42%)woulddropinWestAfricacomparedtothelevelin2013(7.6%).ThisdeclinewouldbestronglylinkedtothegenerallevelofpricesinUEMOAcountries.Thehighestin-flationratesinWestAfricaareobservedintheWAMZarea.Thissituationwasworsenedin2014withtheEbolaVirusDiseaseepidemicthatseverelyhitthreecountriesinthezone.TheaffectedcountriesfacedinflationarypressuresastheEboladiseasespread,leadingtothelossofcompetitivenessofcompanies,adeclineinbusinessactivityaswellasafallinhouseholdpurchasingpower.

17. In2014,theoverall fiscal balance excluding grants asapercentageofGDPforECOWAScouldimprovefrom-4%in2013to-2.9%in2014(IMF,2014).WithinUEMOA,theratiooftheoverallbudgetbalanceexcludinggrantsoverGDPwouldfurtherworsenin2014comparedtotheECOWASlevel.In2014,theoverallfiscalbalanceexcludinggrantsasapercentageofGDPforUEMOAwouldsettleat-7%against-6.4%,duetoaslightincreaseinbudgetrevenuesinthefaceofrisingexpenditures.

18. IntheWAMZarea,asignificantdeteriorationinthebudgetdeficitexcludinggrantsisexpectedin2014forcountriesaffectedbytheEbolaepidemic,namely:Guinea,LiberiaandSierraLeone.Theimpactsoftheepidemichaveledtoaconsiderabledeclineintotalrevenuesofaffectedcountrieswhilstgovern-mentshaveseentheirexpendituresrisingasaresultofinterventionstocontainthedisease.CapeVerdewouldalsoexperienceafurtherdeteriorationofitsratioofbudgetdeficitoverGDPfrom11.5%in2013to12.7%in2014.

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19. Total outstanding debt of the ECOWAS regionwent upmarginally from26.1%ofGDP in 2012 to27.50%in2013becauseofrisingdomesticdebt.Attheendof2013,thestockofpublicdebtaccountedfor37.3%ofGDPagainst38%in2012intheUEMOAspace.ThispositivetrendislinkedtothebenefitsCoted’IvoirederivedfromtheHIPCInitiativeandtheMultilateralDebtReliefInitiative(MDRI).In2014,theoutstandingdebtforWAMZwouldincreasemainlyduetotheEbolaepidemicraginginthreeofitsMemberStates.AsaproportionofGDP,CapeVerde’soutstandingexternaldebtaccountedfor68.9%ofGDPin2013against65.3%ofGDPin2012(WAMA,July2014).

20. Money supply for the ECOWASregionexpandedby4.7%in2013against15.0%in2012.Thisdecel-erationinmoneysupplyisattributedtothatofNigeriawhichgrewby1.2%in2013against16.4%in2012.InUEMOAcountries,moneysupplyisexpectedtoincreaseby9.2%ontheassumptionthattheaccommodativestanceofmonetarypolicywithinUEMOAwouldremainunchanged.Thisexpansioninmoneysupplywouldmainlystemfromthe12.3%increaseinoutstandingdomesticcredit.

21. In2013,the current account balanceforECOWASrecordedasurplus(+2.2%ofGDP).Thisimprove-mentismainlyduetotheperformanceofNigeriawhichrecordedasurplusof7.4%ofGDPagainst7.3%ofGDPin2012.ThepositionoftheoverallbalanceforECOWASrecordedadeficitof0.4%ofGDPagainstasurplusof2.7%ofGDPin2012asaresultofasignificantdeclineinNigeria’ssurplus(-0.4%ofGDPagainst4.3%ofGDPin2012).

22. DataavailableontheUEMOAzoneindicatethecontinueddeteriorationofthecurrentaccountbalancefrom-6.6%ofGDPin2012to-7.9%ofGDPin2013.TheoverallpositionofthebalanceofpaymentofUEMOAMemberStatesrecordedasurplusof0.3%ofGDPfollowingadeficitof0.3%ofGDPin2012.InWAMZcountries,therewasanincreasethecurrentaccountsurplus(4.9%ofGDPagainst+4.3%in2012)inlinewiththeimprovementinthecurrentaccountsurplusinNigeria.

23. Overall,intermsofmacroeconomicconvergence,alltheECOWAScountriescouldnotcomplywiththeall theelevencriteria in2013.ThebestperformancewasachievedbyNigerwhichmetnine (9)convergencecriteria,followedbyBenin,BurkinaFaso,Coted’Ivoire,MaliandSenegalwitheight(8)convergencecriteriaeach.Ontheotherhand,theweakestperformancewasrecordedbyGambiawhichobservedonlytwo(2)criteria,precededbyGhanawithfour(4)criteria,BeninandMaliwhichmettwo(2)additionalcriteriaeachcomparedto2012.Onthecontrary,Gambiaobservedtwocriterialesscom-pared to 2012.

24. As far as economic prospects in West Africaareconcernedin2015,economicgrowthwouldbecon-solidatedat6.9%(FMI,2014)against6.3%in2014.TheUEMOAregionwouldgrowby7.2%.Thisfa-vourableprospectisattributedtoexpectedimprovementsintheenergyandtransportsectorsinSenegalandNigerandinallsectorsinCoted’Ivoire.ItwillbesustainedbythepositiveeffectsoftheexpectedeconomicrecoveryinMaliandtheconsolidationofactivityinNigeria,giventhecountry’sdominantroleintheGDPofWestAfrica,i.e.nearly75%.

25. Average inflation rateintheECOWASregionwouldfallslightlytosettleat7.9%in2015against8.6%in2014.ThelowestlevelsofinflationwouldbeobservedintheUEMOAzonewhereinflationcouldsettlearound2.3%partlyasaresultasharpdeclineinoilprices.

26. The public finance situationwouldremainfragilein2015duetothepriorityattachedtopublicinvest-mentsininfrastructureandsocialsectorswithinacontextoflimitedroomtomanoeuvreintermofin-creasingthetaxpressure.

27. AriskanalysisbasedontheWorldBankrecentdoingbusinessindexpointtoanimprovementinthebusinessenvironment.Also,WestAfricahasbeenrecordingonaverageascoreof52.2overascaleof100accordingtherankingbasedontheMoIbrahimindexongovernanceassessmentandremainstheregionwiththefastestprogress.

28. Part III of this report deals with the social situation in West Africa and the issue of youth employment.

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29. Intermsofhumandevelopment,withanaveragedevelopmentindexof0.450forWestAfrica,mostofthecountriesintheregionfallwithinthecategoryofcountrieswith“lowhumandevelopment”,withtheexceptionofCapeVerdeandGhanathatareinthecategoryofcountrieswith“averagehumandevelop-ment”.

30. ThoughtheregiondidnotachievethevariousMDGtargets,WestAfricahasmadesignificantprogress.Generally,poverty ison thedecline,according to the2014 reportonMDGs (ECAetal,2014)eventhoughthesituationhasworsenedinsomecountries.

31. Gainsmadeonthepovertyfrontwereextendedtohealthandeducation,leadingtoanimprovementintheHumanDevelopmentIndexofallWestAfricancountriesby1%inthe1980s,0.7%inthe1990sandby1.5%sincethe2000s.

32. ThispartalsoaddressesextensivelytheexclusionoftheyouthfromthejobmarketinWestAfrica.

33. Socialexclusionisamulti-facetedconceptthathasundergonemanyconceptualchanges.Itemergedforthefirsttimein1994inFranceandreferredtoacategoryofunemployedindividuals,childrenindif-ficultsituation,drugaddictsandcriminalswhoweredescribedas“socialcases”thatdidnotenjoyanysocialprotection.Today,theconceptofsocialexclusionhasevolvedandiscloselylinkedtothenotionofpoverty.Socialexclusionhasbecomeamultidimensionalconceptofpovertywhichincludessocialparticipationandrespectforrightswithinsociety.

34. ThreetypesofexclusioncanbeidentifiedwithintheAfricancontext:exclusionfromsustainableliveli-hoods,ii)exclusionfromaccesstobasicsocialgoodsandservices;andiii)exclusionfromsocialrights.Youthunemploymentformspartofthefirstformofexclusionandcompelstheyouthtobecloselylinkedto poverty in Africa.

35. Inrecentyears,WestAfricahasbeenrecordingthehighestgrowthinAfricaifnotintheworld.Yet,thelevelofunemploymentisstillasourceofconcern.Majorityofjobsavailabletotheyouthinmanycoun-triesareunstablejobs.Youngpeopleenteringthelabourmarketwithoutacceptablelevelsofeducationareverylikelytoremaininlowproductivityjobsandareaffectedbyvariationsinjobrequirements.

36. Theyouthunemploymentrateisoftenhigherthanthatofadult.AccordingtoILO(2010)estimates,theyouthunemploymentrateinSubSaharanAfricaisgenerally1.9timeshigherthanthatofadults.Unem-ploymentamongtheyouthishigherinurbanareasandevenhigheramongthosewhohaveahighlevelofeducation.Also,theunemploymentrateamongyoungwomenishighercomparedtoyoungmen.

37. FactorsthatcontributetotheexclusionofyoungpeoplefromthelabourmarketinWestAfricaare:(i)lackofjobsintheformalpublicandprivatesector,(ii)lackofprofessionalexperienceamongtheyouth,(iii)assigningofjobsbyaffinities,(iv)mismatchbetweentrainingandskillsrequiredbyemployersand(v)inadequatesearchforjobsandtherelativeineffectivenessofinformationsystemsonthejobmarket.

38. Thisexclusionoftheyouthfromthejobmarkethasmanyconsequencesonthesubregion.Thesein-clude:(i)theriskofpoliticalinstability,(ii)theincreaseofthepovertyrateamongtheyouth,(iii)increaseddifficultyinintegratingtheyouthintothejobmarketandfinally(iv)thepersistenceofaviciouscycleofpoverty and social exclusion.

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Recommendations

39. Toaddressthechallengeslistedabove,thereportmakesthefollowingrecommendations:

To Member States:

(i) Pursueandexpandpublicinvestmentsinordertoreducethecostsoffactorsofproduction,facilitatetheregionalinterconnectionandsupporteconomicgrowth;

(ii) Sustainincreasedpartnershipinitiativeswiththeprivatesectorandutilizethefinancialmarketstofi-nanceinvestmentsthatwillguaranteefiscalsustainability;

(iii) Takeintoaccountthedevelopmentalagendaandregionalintegrationinthedevelopmentandimple-mentationofeconomicstrategiesandpolicies;

(iv) Developandconsolidatestrategiestoaddressyouthemploymentchallenges,inparticular: » Fortheintegrationofyoungpeopleintheagriculturalsectorbyremovingconstraintsonagricultural

productivity,especiallyintermsofaccesstofinancing,adequatelandpolicy,weakskillsandinad-equatesupportinfrastructureforindividualentrepreneurs;

» Theimplementationofmeasurescombiningfinancingfacilitiesandtechnicalandmanagementca-pacitybuildingforyounggraduates;

» Theimplementationoftaxincentivemeasuresandprogramsfortheemployabilityofyounggraduatesbycompaniesandtheacquisitionoffirstworkexperience;

» Strengtheningtransparencyonthelabourmarketthroughtheestablishmentofplatformsforinforma-tiononjobopportunitiesandincentivesforcompaniestoimplementgoodrecruitmentpractices;

To sub regional economic communities:

i. Acceleratetheimplementationofprioritydevelopmentprogrammes,namely,theCommunityDevelop-mentProgram(CDP)andRegionalEconomicProgramme(REP)PERofECOWASandUEMOArespec-tivelywhileattachingurgencytoinvestmentsthatwillfacilitateregionalinterconnection;

ii. Developandconsolidatetheregionalcapacitytorespondtohealthcrisesandtheirconsequences;iii. ImplementtheECOWASSahelstrategyandstrengthencrisismanagementmechanismsinordertocon-

tainthesecurityandterrorismrisks.

1

Introduction

1. Thereportontheregionalsocio-economicprofilecompiledbytheSub-RegionalOfficeforWestAfricaoftheEconomicCommissionforAfrica(ECA/SRO-WA)providesananalysisofthesocialandeconomicconditionsover theperiod2013-2014andprospects in2015 for theEconomicCommunityofWestAfricanStates(ECOWAS)region.ItissubmittedtotheIntergovernmentalCommitteeofExpertstoteaseouttherecommendationsondevelopmentpoliciesandstrategiesthatarelikelytocontributetostructuraltransformationaswellaseconomicandsocialdevelopmentofcountriesintheregion.

2. In2014,WestAfricaisexpectedtomaintainarelativelyhighgrowthrateof6.3%,thusconsolidatingitsroleastheengineofgrowthonthecontinentinrecentyears.

3. Therelativelyfavourableeconomicenvironmentishoweverfraughtwithchallenges.Infact,economicactivityisstillsustainedbyperformanceinsectorsthatarenotlabourintensive,namelythemines,petro-leumandservices,especiallytelecommunications.

4. Theagriculturalsectorwhichemploysabout60%oftheworkingpopulationintheregionisstillsufferingfromlowproductivityandoverrelianceontheweatherthoughthesectorrecordedgrowthinNigeriaandCoted’Ivoirein2013.Withregardtothesecondarysector,theshareofthemanufacturingsector,estimatedatnearly9%ofGDPin2013(ECOWAS,2014)remainedmodest,leadingtoamarginalexpan-sioninlabourintensiveandhighvalueadditionsubsectors.

5. Besides,thepositivegrowthprospectsfor2014and2015maybeconstrainedbyimportantriskfactorsassociatedwiththeinstabilityinnorthernNigeriaandtheSahelregion,thespreadoftheEbolavirusdis-easethathasalreadyhadanegativeimpactoneconomicandsocialperformanceinaffectedcountriesandfluctuationsinthepriceofcrudeoilandweatherconditions.

6. Atthesociallevel,WestAfricaisstillconfrontedwiththechallengeof“lowhumandevelopment”.Theregion’srankingaccordingtheUNDPHumanDevelopmentIndexfor2014showsthatoutofthelasttwentycountries,halfofthemareWestAfricancountries.

7. Itisagainstthisbackgroundthatthisreportonthesocio-economicprofileofWestAfricain2014hasbeencompiled.Thecurrenteditioncoversareviewoftheinternationaleconomicenvironment,ananal-ysisoftheregionaleconomicandsocialsituationintheregionovertheperiod2013-2014andprospectsfor2015.ThereportanalysesalsotherisksintheWestAfricanregionanddealswithonedevelopmentchallengefortheregion,namelythelabourmarketandtheexclusionoftheyouthfromthesaidmarket.

8. TheSubregionalofficecompiledthisreportbasedondocumentspreparedbysubregionalinstitutions,includingECOWAS,WAMA,UEMOA,BCEAO,inadditiontoitsowndocumentation.OthersourcessuchastheUnitedNationsDivisionforEconomicandSocialAffairs(UN-DESA)andtheIMFwereusedfordataorinformationthatarenotavailableatthesubregionallevel.

2

1. International environment

1.1 Global context

9. Theupturnineconomicactivitywasexpectedtostrengthenin2014,withagrowthrateestimatedat2.6%,indicatingaslightincreasecomparedto2.5%in2013(UNDESA,2015)1.

10. Thistrendinworldproduction,thoughlimited,markedthefirstbreakwithslowgrowthof1.9%recordedovertheperiod2008-2011asaresultoftheworldfinancialcrisiswhichoccurredin2008-2009.How-ever,itreflectsthedifficultiesdevelopedeconomiesarefacingintheirquesttoreturntopre-crisisgrowthrates.Theaverageincreaseinactivityovertheperiod2005-2007wasmorethandoubletheaveragelevelobservedovertheperiod2011-2014,2.7%against1.25%tobeprecise.

11. ThissituationwassustainedinEuropebythefragilerecoveryof1.3%in2014againstzerogrowthin2013,withsomecountriesalmostfallingintorecession.InthecaseofJapan,inspiteofthecombinedpoliciesoffiscalandmonetarystimulus,thecountryrecordedaweakergrowthof0.4%in2014against1.5%in2012-2013.Ontheotherhand,theUnitedStatesconsolidatedtheireconomicrecoverywithanexpansionineconomicactivityby2.2%and2.3%in2013and2014respectively.

12. Asregardstransitionanddevelopingcountries,productiontrendswereverymixedin2014.Theperfor-manceofmajoreconomiesinLatinAmericaandtheCommunityofIndependentStates,especiallyBrazilandRussiawasverydisappointing.Thesetwocountrieswithgrowthratesof0.3%and0.5%respectivelyin2014wereexposed to specificconstraintsof structuraldeficitsandmacroeconomicmanagement,highfinancialrisksaswellasgeopoliticalpressures.

13. Onthecontrary,EastandSouthAsiancountriesmaintainedahighpaceofactivityat5.9%in2014.ThistrendwasmainlysustainedbyChinawhichcontinuedtoexperienceahealthygrowthat7.3%in2014against7.7%in2013,butindicatingadecelerationwhencomparedtotheaverageof9.6%overtheperiod2008-2011.

14. WithregardtoAfrica,thegrowthprofilestabilizedat3.5%in2013and2014afteraleapto5.6%in2012.Thegrowthobservedin2014,however,reflectedanuancedperformancebytheregion.Thus,EastandWestAfricaconsolidatedtheirpositionasthedrivingforceofAfricangrowthastheygrewby6.5%and6.3% respectively (ECOWAS2015),while growth remainedmoderate inCentralAfrica at4.3%andverylimitedinSouthernandNorthernAfricawith2.9%and1.6%respectively.

1 DatausedinthischapterwereobtainedfromtheWorldEconomicSituationandProspects,UNDESA,January2015,un-

lessotherwisestated.

3

Figure 1 : World Economic Outlook (in percentage change)

e: estimates, p: projections Sources: UN DESA, World Economic Situation and Prospects, January 2015

15. Concerninginflation,pressuresonpricesweregenerallycontainedatthegloballevelat3%,however,withcontrastingsituations.Thesepressureswerethuslimitedindevelopedcountries,withevenrisksofdeflationinsomeEUcountrieswhichexperiencedadecelerationinthegenerallevelofpricesfrom1.5%in2013to0.7%in2014withinacontextofaweakgrowthandstrengthoftheEurointhefirsthalfof2014.

16. Indevelopingandtransitioncountries,thelevelofinflationremainedrelativelyhighinsomeoftheseeconomies,eventhoughadownwardtrendwasanticipatedintheshorttomediumterm.IntheCommu-nityofIndependentState,theaverageincreaseinpricesreached8.1%in2014,mainlyduetothestrongdepreciationinthecurrencyofmostcountriesintheregion.InAfrica,averageinflationwouldfallfrom7.2%to6.9%,underthecombinedeffectofmoreprudentmonetarypoliciesandamoderatevariationinimportprices.InSouthAsia,theeasingofinflationarypressuresobservedsince2012wasconsolidatedatalevelestimatedat2.4%in2014.ThesametrendwithamorepronounceddeclinewasobservedinSouthAsiawhereinflationwouldfallfrom14.7%in2013to9.2%in2014.ThisdropwasonaccountofIndiaandtheIslamicRepublicofIranwhichrecordedrespectivelyanincreaseof5.7%and17.8%in2014against10.1%and39.3%in2013.ForLatinAmericaandtheCaribbean,pressuresonpricewerestrongerin2014,generallyraisinginflationfrom7.2%to10.2%between2013and2014.ThissituationwasonaccountofArgentinawhichrecordedaninflationrateof25%in2014against10.9%in2013withinacontextmarkedbypressuresfromthecountry’smajorcreditors.

17. Againstthebackdropofamoderateworldgrowth,employmentgrowthrateremainedweakat1.4%in2014,aratebelowthegrowthrateobservedpriortothe2008-2009financialcrisis.Thistrendhigh-lightedconcernsaboutthepersistenceofhighlevelsofunemploymentinmostregions.Indevelopedcountries,thedynamismonthejobsmarketintheUnitedStatein2014,withanemploymentratebelow6%wasoffsetbythehighlevelsofunemploymentintheEurozone,wheretheyouthunemploymentratehit60%inGreece,53%inSpain,44%inItalyand35%inPortugal.

18. Withregardtodevelopingandtransitioncountries,unemploymentratesremainedstableandrelativelylowin2013inSouthandEastAsia,settlingat4.5%and4%respectively.Thissituationispartiallylinkedtothelimitedriseinnumberofjobseekersduetothegrowingsizeoftheagedpopulationandthelateentryoftheyouthontothelabourmarketasaresultofprolongedyearsofeducation.Ontheotherhand,unemploymentcontinuedtoriseinNorthAfricaandWestAsiaat12.2%and10.9%respectively.

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19. Itisworthnotingtheinadequatenatureofunemploymentindicatorsindevelopingcountriesduetotheextensiveinformalsectorandunder-employmentinmanycountries.Thus,theInternationalLabourOr-ganization(ILO)estimatesat30to40%theshareofinformaljobsintotalemployment.

20. Intermsofcommodityprices,crudeoilpriceswereonadownwardtrendinthecourseof2014,fall-inginNovember2014toitslowestlevelinfiveyears.Thisdownwardtrendwasfuelledbylowdemandwithinacontextofexcesssupplybyproducersaswellastheexpansionofnonconventionaloilproduc-tionintheUnitedStatesandCanada.Concerningnon-oilcommodities,thenominalpriceindexofnon-oilgoodsfellby6%overtheperiodJanuarytoAugust2014onyear-on-yearbasis,reflectingarelativedrop in most commodity prices excluding oil.

21. Asregardsworldtrade,thevolumeofimportsandexportsgrewrespectivelyby3.3%and3.5%in2014against2.9%and3.1%in2013.Thisimprovementreflectsagenerallymixedtrendintheexternaltradepositionofthevariousregionsacrosstheworld.Developedcountriesconsolidatedtheirpositiveprofile,withtheirvolumeofexportandimportsgrowingrespectivelyby3.5%and3.3%in2014against2.2%and1.2%in2013.Alessfavourabletrendwasobservedindevelopingcountries,withadeclineintheexportandimportvolumesby4.5%and5.3%in2013against3.8%and3.9%in2014.

22. Intermsinternationalcapitalflows,themajordevelopmentwastheexpected6%declineinnetprivatecapitalinflowsintoemergingeconomies,whencomparedtothelevelin2013.Thisdeclinestemmedmainly from capital flights in Russia as a result of the difficult economic situation prevailing in thecountryandgeopoliticaltensionsintheregion.WithregardtothespecificcomponentofForeignDirectInvestments (FDI) inflows,apositiveprofilewashoweverobservedwithanannualaveragehoveringaround$550billionoverthelastthreeyears.Theseflowswereprimarilydirectedtoemerginganddevel-opingcountriesbothintermsofinflowsandoutflows.Withrespecttooutflows,anamountof460billiondollarsfromemergingeconomieswasrecordedin2013.

23. Finally,onthecurrencymarket,thedominanttrendwasthesteadyappreciationofthedollaragainstthemajorreferencecurrencies,theEuro,theYenandthePoundSterling.ThedollarindexwhichmeasuresthevalueofthedollaragainstabasketofsixcurrenciesofdevelopedcountriesreachedinNovember2014itshighestlevelinfour(4)years.

24. TheappreciationoftheAmericancurrencyagainsttheEuroismainlyattributedtothearelativelymorefavourableeconomicsituationintheUnitedStatesbothintermsofgrowthandjobcreationaswellasthegradualdeparturefromtheexpansivemonetarypolicyoftheFED.Ontheotherhand,theEuropeanCentralBankchosethereversepath,markedbyareductionofkeyratesandmassiverefinancingoftheEuropeaneconomy,confrontedwiththerisksofdeflation.

1.2 Recent developments and prospects in Africa

1.2.1 Economic situation in 2014

25. Economicgrowth inAfricaremainedat3.5%in2013and2014withinacontextamoderateupturninworldactivitymarkedbyaslowrecoveryindevelopedeconomieswiththeexceptionoftheUnitedStatesandarelativestrengthofactivityindevelopingandemergingcountries.Thevibrancyinproduc-tionisstilllinkedtostrongprivateconsumptionandinvestmentsinallthefiveregionsofthecontinent.Thepositivetrendinthesetwodemandcomponentswassustainedbyahigherconsumerconfidence,anexpansioninthemiddleclassandanimprovementinbusinessenvironmentaswellashigherpubliccapitalexpendituresininfrastructuraldevelopment.Ontheotherhand,thecontinentwasstillconfront-edwithanexternaltradeimbalanceowingtoincreasedimportpressuresfromthedemandforcapitalgoods for infrastructural and exploration works.

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26. Withregardtotherelianceontheoilsector,activitygrowthinexportingcountriesvirtuallystagnatedat3.2%in2014against3.3%in2013duetothemoderateincreaseinoilpricesandtheirsharpdeclineinthesecondhalfoftheyearaswellasdisruptionsinproduction,particularlyinNorthAfrica.Asfarasimportingcountriesareconcerned,growthstoodat3.7%,thesamelevelasin2013.Withinthisgroup,countrieslikeEthiopiaandRwandawhicharenotendowedwithmineralandoilresourcescontinuedtopoststronggrowthat8.2%and6%respectivelyin2014,thankstothedynamismintheservicessector,agriculture and infrastructure investments. .

27. Onregionalbasis,variousgrowthdynamicswererecordedwithagapbetweentheEast-WestandNorthSouthaxes.TheEast-WestaxiscontinuedtobetheenginesofgrowthinAfrica,withrespectivegrowthof6.5%and6.3%(ECOWAS2015)in2014forEastandWestAfricawhileinNorthAfricaandSouthernAfrica,activitygrewby1.6%and2.9%respectively.CentralAfricarecordeda leapof4.3%in2014against2.2%in2013.

28. EastAfricaconsolidateditspositionastheleadingregionintermsofgrowth,mainlysustainedbytheeconomiesofKenyaandUgandaduetoastrongperformanceinthefinancial,telecommunicationsandtransportsectorsaswellasincreasedurbanization,infrastructureinvestmentsandtheexpansionofthemiddleclass.WestAfrica,onitspart,maintainedarelativelyfastpaceofgrowthinproductionthanksessentiallytobuoyantactivityinNigeriawhichwouldgrowby6.2%.

29. GrowthinNorthAfrica,thoughmoderate,sawanimprovementcomparedtothe1.4%achievedin2013asresultoftheimprovementinthepoliticalsituationinEgyptandTunisia.SouthernAfricamaintainedtheexpansioninactivityat3%onaccountofthemodestgrowthinSouthAfricaby1.4%in2014.

Figure 2: Recent trend in economic growth in Africa

Sources: UN DESA, World Economic Situation and Prospects, January 2015.

30. Withregardtoinflation,thedecelerationinthepaceofpriceincreasesobservedsince2012wascon-solidatein2014at5.6%thankstothemoderateriseinthepricesoffood,fuelandimportedindustrialproductsaswellastheimplementationofrestrictivemonetarypoliciesinsomecountrieswhereinflationusedtobehigh.

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31. Attheregionallevel,CentralAfricacontinuedtorecordthelowestinflationrateat3.6%in2014asaresultofthereplicationofrestrictivemonetarypoliciesoftheEurozoneintheregionduetothefactthatthecommoncurrency,theCFAF,ispeggedtotheEuro.InSouthernAfrica,theslighteasingofinflation-arypressureswouldberecordedwiththeinflationratefallingfrom6.3%to6.2%between2013and2014thankstothedownwardtrendinfuelandfoodprices.ForEastAfrica,inflationstabilizedat5.9%between2013and2014.Theinflationarytrendwaspartiallylinkedtoperformanceinseasonalagricul-tureproductioninKenyaaswellasthedepreciationofthenationalcurrency,theshilling,andhikesinelectricitytariffsinTanzania.

32. InthecaseofWestAfrica,inflationarypressureswereslightlylowerin2014,settlingat7.4%against7.6%in2013(ECOWAS,2015).InNorthAfrica,therewasaconsolidationofthedownwardtrendinprices,withadecelerationofinflationfrom8.6%in2013to7.7%in2014.InflationarypressuresweremorecontainedinAlgeria,MauritaniaandMoroccoduetothedeclineinfoodpricesandamoderateincreaseindomesticdemand,especiallyinMorocco.Nonetheless,thesepressureswerehigherinLibyaandEgyptowingtodisruptionsinthesupplychainofproductsasaresultofpoliticalunrest.

Figure 3: Recent inflationary trend in Africa

Sources: UN DESA, World Economic Situation and Prospects, January 2015.

33. Asregardsthefiscalsituation,countriescontinuedtogenerallyrecordbudgetdeficitsstemmingfromincreasedcapitalexpenditures,wagebill,transfersandsubventionsaswellassocialsafetynetpolicies.MajoreconomiessuchasSouthAfrica,Tanzania,Cameroon,KenyaandGhanawerestillconfrontedwithrelativelyhighbudgetdeficits,withrespectiveratesof4.4%,5%,5%,6%and7.8%in2014.

34. Concerningtheexternalposition,oilexportingcountrieswouldmaintainthesurplusontheircurrentac-countbuttheexternalimbalanceswouldeaseforoilimportingcountriesthankstothedownwardtrendofcrudeoilpricesinthefirsthalfof2014.Theappreciationofthedollarcouldalsosustaintheexportofgoodsandservicesinoilexportingcountriesaswellascountrieswithabetterindustrialfabriccomparedtocountrieswhichexportsnaturalresources.However,thesepositivetrendscouldbeoffsetbythein-creaseinthepricesofimportedgoodsvaluedindollars.Forthetwoleadingeconomiesonthecontinent,thesituationwouldremainunevenwithabalancethatwouldrecordasurplusof4.9%(ECOWAS,2015)forNigeria,whileSouthAfricawouldrecordadeficitof5.4%in2014.

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1.2.2 Prospects for Africa in 2015

35. Intheshortterm,Africawouldacceleratethepaceofgrowth,withactivitygrowingby4.6%in2015against3.5%in2014.Thisreneweddynamismwouldstillbedrivenbystrongpublicandprivatede-mand.Infact,privateconsumptionwouldbesustainedbytheexpansioninthemiddleclassandmoder-ateincreaseinprices.Publicdemandwouldbeconsolidatedthankstohigherpubliccapitalexpendi-tures.Economicactivityonthecontinentwouldcontinuetobenefitfrominvestmentandthediscoveryof new minerals.

36. Onregionalbasis,NorthernandSouthernAfricawouldrecordmorefavourableprospectsasthegrowthclimbfrom1.6%and2.9%in2014to3.9and3.6%in2015.InNorthAfrica,theimprovementinthesocio-politicalsituationwouldspurgrowthwhileinSouthernAfrica,regionalactivitywouldbesustainedbyinvestment inmineralresourceandgasexplorations inMozambique, therecovery inprivatecon-sumptioninSouthAfricaandinvestmentsinnondiamondsectorsinBotswana.

37. WestandCentralAfricawouldexperienceamoremoderateactivity growth from4.3%and6.3%respectively(ECOWAS,2015)in2014to4.7%and6.9%in2015(IMF,2014)withinacontextmarkedbyincreasedrisksofpoliticalinstabilityandsecuritythreats,especiallyintheCentralAfricanRepublic,NigeriaandtheSahelSaharanzone.

38. AsregardsEastAfrica,thegrowthrateisexpectedtojumpfrom6.5%in2014to6.8%in2015thankstotheexpansioninbankingandtelecommunicationservices,themiddleclassandurbanizationinKenyaaswell as increasedactivity in construction,financial, transport and telecommunications services inUganda.

39. Inflationwouldreach6.9%in2015,thesamelevelasin2014.Theeasingofinflationarypressureswouldbeasresultofamoderateriseinpricesofessentialgoods,includingfoodproducts,importedcapitalgoodsandindustrialproductsaswellasthedownwardtrendinoilprices.

40. Concerningthefiscalsituation,publicdeficitswouldpersistin2015,duetohighercapitalexpenditures,expansioninthepublicwagebillandsocialsafetynetprogrammesunderwayinmostcountriesonthecontinent.

41. Despitethisgenerallyfavourableenvironment,theAfricaneconomymaybeconstrainedbybothinter-nal and external risk factors.

42. Ontheexternalfront,amoresignificantdropinoilandcommoditypricescouldaffectproducingcoun-triesandleadtoadeteriorationofpublicfinancesandtheeconomicsituationingeneral.Theslowdowningrowth inChinaaswellas the slow recovery in theEurozonecouldalsoadverselyaffectexportflowsinthesecountries.Finally,changesinmonetarypolicyinEuropeandtheUnitedStatesaswellasuncertaintiesonthecapitalmarketcouldgenerateincreasedvolatilityintheexchangeratesofAfricancurrenciesandexposecountriestostrongerinflationarypressures,reducedcompetitivenessandtighterfinancingconditions.

43. Attheinternallevel,eventhoughtheeffectsoftheEbolaepidemicwerelargelyconfinedtothethreemostaffectedcountries(Guinea,LiberiaandSierraLeone),thepersistenceandspreadofdiseasein2015couldaffecttheWestAfricaregion,especiallytrade,tourismandtransportsectorsaswellastheagricul-turalsectorinadditionthenegativesocialimpact.ThecontinentwouldstillremainexposedtopoliticalinstabilityandsecuritythreatsinNorth-EastNigeria,theSahelstrip,LibyaandSomalia.Finally,theef-fectsofuncertainclimaticconditionsonperformanceintheagriculturalsectorinparticular,willremainin most regions in Africa.

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II. Regional economic profile over the period 2013 – 2014 and prospects for 2015

44. EconomicactivityinWestAfricaisexpectedtogrowby6.3%against5.6%in2013.Thistrend,whichconsolidatedthefavourablegrowthofabout5.6%overthelastfouryears,occurredwithinacontextmarkedbyuncertaintiesresultingfromtheEbolaepidemicaswellassecurityandpoliticaltensionsinnorthernNigeriaandtheSahelzone.

2.1 Economic situation

2.1.1 Economic growth

45. In2014,theWestAfricaregionmaintainedthepaceofgrowthwitharateof5.6%against5.0%in2012whiletheworldeconomycontinuedtoexperiencemoderaterecovery.ThebuoyancyofactivityintheECOWASsubregionisattributedtothegoodperformanceachievedbycountriesintermsofeconomicgrowthin2013:SierraLeone(13.0%),Côted’Ivoire(9.0%),Liberia(8.1%),Ghana(7.6%),BurkinaFaso(6.6%),andNigeria(5.4%)(ECOWAS,2015).

46. WithregardtotheUEMOAzone,thegrowthratestoodat5.8%in2013against6.6%in2012.MostoftheUEMOAMemberStatesexperiencedthesamegrowthtrend(sixoutofeightcountriesrecordedgrowthratesabove8%)(WAMA,2014).Thisgrowthwasfuelledbythegoodperformanceinthesecond-ary(4.9%forindustrialproduction)andtertiarysectors.Inthisregard,theturnoverindexforretailtradewentupby11.9%inMemberStates(BCEAO,2014).The2013/2014farmingseasonwasadverselyaf-fectedbyerraticrainfallinsomeSahelcountries.However,foodproductionrecordedascoreabovetheaverageforthepreviousfiveseasons(WAMA,2013).GDPfortheUEMOAzoneaccountedforabout14.6%ofGDPfortheECOWASregion.

47. In theWAMZarea,growth stoodat6.9%against6.8% in2012.Thisperformancewas sustainedbygrowthinNigeria(5.4%in2013against4.2%in2012)andSierraLeone(13.0%in2013against15.2%en2012)(CEDEAO,2015).CapeVerdeobservedadeclineingrowthwhichfellfrom2.5%in2012to1%in2013duetothecontractionindomesticdemand(WAMA).

48. Withrespecttoexpenditure,investmentwastheengineofgrowthwithintheECOWASregion.Thissitu-ationwasonaccountofthedevelopmentofsocio-economicinfrastructureundervariousprogrammesinmanycountriesinordertoachieveeconomicemergence.

49. In2014,economicgrowthwithintheECOWASregionwasexpectedtoremainontrackandsettleat6.3%against5.6%in2013(CEDEAO,2015).Thereneweddynamisminregionalactivityisattributedtothegoodperformancerecordedinmostcountries,withagrowthrateabove6%forsomecountriesintheregion.Coted’Ivoire,SierraLeone,Niger,BurkinaFaso,achievedGDPgrowthof9%,6.6%,7.1%et4.5%respectively.Nigeria’sGDPwouldbeupby6.2%(CEDEAO,2015).

50. Thisgoodperformancemaybeduetorisingpublicandprivateinvestmentsinsomecountrieswithintheframeworkofbuildingdevelopmentinfrastructure.Itwasalsosustainedbythegoodshowinginothersectorsoftheeconomysuchastelecommunications,tradingandagriculture.

51. InNigeria,whichthankstothechangeinthebaseyearforthecalculationofitsGDPfrom1990to2010accountsfor75%oftheregionalGDP(CEDEAO,2015),activitywasdrivenbygrowthinnonoilsectorssuchasagriculturetrading, informationandtelecommunicationtechnologies,entertainmentindustryandotherservicessectors(AfDB,OECD,UNDP2014)

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52. At the levelof theeightUEMOAcountrieswhichrepresent14.6%ofGDPfor theECOWASregion,economicgrowthwouldclimbfrom5.8%à6.8%between2013and2014.Thissituationisattributedtoacceleratedeconomicgrowthinallthecountries,withCoted’Ivoire,thebestperformingeconomyintheregionin2013and2014,recordinga9%expansioninactivityin2014.CountriessuchasCoted’Ivoire,GuineaBissauandMaliarerecoveringfrompoliticalinstabilitycrisesorarmedconflictsthathavecrip-pledtheireconomiesintherecentpast.

53. AsregardstheWAMZarea,growthprojectionsbeforetheEbolaepidemichadtobereviewedforcoun-triesthatweremostaffectedbythedisease,namely,Guinea,LiberiaandSierraLeone.ThecontractioninGDPwouldvarybetween2to5percentagepoints.Intermsofpurchasingpowerparity(PPP),thiscorrespondstoatotallossinGDPtermsofabout716milliondollarsforthesethreeeconomies.Sincetheoutbreakoftheepidemic,andthesubsequentslowdowninactivity,thesecountrieshaveonseveraloccasionsreviewedtheirGDPprojectionsfor2014(ECA,2015).GuinearevieweditsGDPgrowthratefrom4.5%to3.5%andthento1.3%;thatofSierraLeonewasreviewedfrom11.3%to8%andto6.6%;thatofLiberiawascutfrom5.9%to2.5%thento1%andsettledat0.3%accordingtotheCentralBankinitsJanuary2015reportontheeconomicsituationin2014.

Figure 4: Real GDP Growth

*estimates- ** projections Source: ECOWAS AND ECA/SRO-WA, 2015 Data

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Box 1 : Change in the base year for GDP calculation in Nigeria: A more realistic picture of the Nigerian economy Inordertogiveamorerealisticpictureofitseconomy,Nigeriadecidedtochangethebaseyearandconductedareassessmentofthecountry’snationalaccounts,includingGDP.Nigeriawasusing1990asreferenceyeartocal-culateitsGDPwhichdidnottakeintoaccounttherapidgrowthofsomeactivitiesthatareboominginthecountrysuchasICTandtheentertainmentsector(especiallythefilmindustryofNollywood),thusundervaluingthenationalwealthofthecountry.ItmustberecalledthattheUnitedNationsStatisticalCommission(UNSC)recommendedthatcountriesrecalculatetheirGDPeveryfiveyearstoreflectchangesinthestructureofproductionandconsumption.

Followingactivitiesinvolvedinthechangeoftheyearto2010asthenewreferenceyear,theNationalBureauofStatistics(NBS)publishedinJuly2014itsfinalestimatesofnominalandconstantGDPaswellastheGDPgrowthratefortheperiod.ThisresultedinNigeria’sGDPalmostdoubling,makingthecountrythelargesteconomyinWestAfricaandthe26theconomyintheworld.Itaccountsfor45%ofSubSaharanGDP(measuredincurrentterms)and1%ofworldGDP.

Inrelationtothesubregion,Nigeria’sGDPwouldrepresentin2014over75%ofGDPfortheECOWASregion.ItisfollowedbyGhana(4.8%),Coted’Ivoire(4.6%)andSenegal(2.1%).Thefourcountriesaloneaccountfor89.5%ofwealthproducedinWestAfrica.

Source: Report on regional prospects, IMF, October 2014 and ECOWAS (2015) ECA/SRO-WA

2.1.2 Inflation

54. The level of inflation stood at 7.6% in 2013, reflecting a deceleration compared to 10.3% in 2012(ECOWAS,2015).Thisdropininflationisattributedtotheeasingofpressuresontheworldcommoditymarketsandtheeffectsoftightmonetarypoliciesinmanycountries.

55. WithintheUEMOAzone,inflationfelldrasticallyin2013andsettledat1.5%against2.7%in2012.Thisdevelopmentisduetothedropinlocalgrainspricesasaresultofa24.8%increaseingrainsproductionduringthe2012/2013farmingseasonandthecostofenergyproductsinsomecountries.AlltheMemberStatessawtheirinflationdecline,withtheexceptionofNiger.

56. InWAMZ,therewasalsoadipinthelevelofinflationwhichsettledat8.4%in2013against11.7%in2012.Thisdropisonaccountoftheslightreductioninpressuresonpricesinseveralcountries,includingNigeria(8.5%against12.2%in2012),Guinea(11.9%against12.8%in2012)andSierraLeone(8.2%against11.4%in2012).Ontheotherhand,theothercountriesinthezonerecordedhigherinflationrates(WAMA).

57. In2014,thelevelofinflation(7.42%)wasexpectedtodropinWestAfricacomparedtothelevelin2013(7.6%).

58. IntheUEMOAzone,inflationfellfrom1.5%to-0.1%in2014.Coted’IvoireandtoalesserextentSen-egalandTogosawtheirinflationarypressuresreducebetween2013and2014from2.5%to0.5%andfrom0.7%to-1.1%and1.7%to0.2%respectively.AllMemberStateswereexpectedtobebelowthecommunitystandardwhichrequiresaninflationratebeloworequalto3%.

59. ThehighestinflationratesinWestAfricawererecordedintheWAMZcountries.Thissituationwascom-poundedin2013bytheEbolaepidemicwhichaffectedthreecountriesinthezone.Theaffectedcoun-triesfacedinflationarypressuresasthediseasespread,leadingtolossofcompetitivenessofcompanies,adeclineincommercialactivitiesaswellasthecrumblingofthepurchasingpowerofhouseholds.Forex-ample,inLiberia,thelevelofinflationinJune2014reached11%andstoodat14.7%inDecember2014against8.5%in2013.InSierraLeone,inflationcouldreach10%against8.5%in2013.TheinflationarypressureinWAMZweresustainedbythe15.5%leapinGhanamainlyasaresultofhikesinelectricityandwatertariffsaswellasthedepreciationofthelocalcurrencyagainsttheUSdollar.

6.3

4.3

5.4

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Figure 5 : Consumer prices (Annual average, percentage change)

Source: ECOWAS AND ECA/ SRO - WA Data, 2015

2.1.3 Public finances

60. TheoverallbudgetdeficitexcludinggrantsfortheECOWASregionin2013wasestimatedat4%ofGDP,indicatingadeteriorationcomparedtosituationin2012whichwas3.6%ofGDP(WAMA).Thecon-tinuouspublicinvestmentsandrisingwagebillsareprobablythecauseoftheworseningbudgetdeficitexcludinggrants.Inthiscontextofageneraldeterioration,somecountriesimprovedtheirsituationin2013comparedtothatof2012,namely,SierraLeone,GuineaBissau,SenegalandGambia.Thebudgetbalancesof these countries in2013 stood respectively at -5.1%, -6.0%, -8.2%and10.8%against-8.0%,-8.1%,-9.0%and-13.5%in2012.Nigeriaexperiencedamoderateincreaseinitsbudgetdeficitof-2.7%ofGDPin2013against-2.5%in2012.CountrieswhichrecordedadeteriorationwereNiger(-9.8%against-7.3%in2012),Togo(-9.0%against-8.2%in2012),BurkinaFaso(-8.8%in2013and2012),Ghana(-8.7%against-7.6%in2012)andGuinea(-7.5%against-5.4%in2012).AccordingtotheIMF,totalrevenuesexcludinggrantsfortheECOWASregionjumpedby12.6%in2013against15.2%whileexpendituresgrewby16%against16.7%in2012.

61. IntheUEMOAzone,thepublicfinancesituationin2013wasmarkedadeteriorationofbudgetdeficitsduetoahighergrowthinexpenditures(UEMOA,2014).Totalrevenueswentupby9.9%toaccountfor18.5%ofGDPasin2012.Theupwardtrendinrevenuesstemmedfromeffortsmadetocollecttaxrev-enueswhichclimbedby9.0%toaccountfor18.5%ofGDPagainst18.0%in2012.

62. ThistrendissustainedbyreformsunderwaywithinfinancialauthoritiestocombattaxfraudandensureabetteradministrationofVAT,applystrictcontrolsonexemptionsandestablishabettertaxationsystemintheinformalsector.TheincreaseintaxrevenuesislinkedtothesharpriseinBenin(11.7%),BurkinaFaso(11.4%),Niger(12.4%)andTogo(23.1%)andalimitedincreaseinCoted’Ivoire(8.8%)andMali6.0%).Nontaxrevenuesjumpedby16.6%tosettleat2.1%ofGDPagainst1.9%in2012.Grantsincreasedsignificantlytoaccountfor3.1%ofGDPagainst2.3%in2012.ThehighestincreaseswererecordedinBurkinaFaso,MaliandCoted’Ivoire.

63. Totalexpendituresandnetlendingclimbedby12.5%in2013toaccountfor25.1%ofGDPagainst23.8%in2012.Thisgrowthwasessentiallyfuelledbycapitalexpenditureswhichwentupby31.0%.Currentexpendituresgrewby4.4%asaresultofa4.5%increaseintransferexpendituresandsubsidiesaswellasa6.9%riseinthewagebill,offsetbya6.9%dropinoperationalexpenditures.Inall,theover-

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alldeficitexcludinggrantsandtheoveralldeficitforUEMOAworsenedandaccountedrespectivelyfor6.4%ofGDPand3.3%ofGDPin2013against5.5%and3.1%in2012.

64. InWAMZ,theoveralldeficitexcludinggrantstoodat3.3%ofGDPin2013against3.0%ofGDPin2012,representingadeteriorationof3percentagepointsofGDP.Thisdeteriorationisduetothepoorperformanceobservedintheothercountriesinthezone,withtheexceptionofGambiaandSierraLeone.

65. InCapeVerde,theoveralldeficitexcludinggrantsshrankbutremainedhighat10.9%ofGDPagainst14.0%ofGDPin2012.Thishighlevelofdeficitismainlylinkedtothegovernment’swishtotakead-vantageofthelowinterestratesontheinternationalmarkettoraisefundsforprioritypublicinvestments.

66. In2014,theoverallbudgetbalanceexcludinggrantsasapercentageofGDPforECOWAScouldim-provefrom-4%in2012to-2.9%in2014(IMF,2014).Thissituationwouldbeattributabletoanimprove-mentinthebudgetdeficitincountriessuchasBurkinaFaso(-8.2%in2014against-9.4%in2013),Sen-egal(-7.9%in2014against-8.1%in2013),Gambia(-10.1%in2014against-10.7%in2013),Ghana(-8.4%in2014against-10.5%in2013)andNigeria(-1.7%in2014against-2.3%in2013).

67. WithinUEMOA,theratiooftheoverallbudgetbalanceexcludinggrantstoGDPwoulddeterioratefur-therin2014comparedtotheregionallevelforECOWAS.In2014,theoverallbudgetbalanceexcludinggrantasapercentageofGDPforUEMOAisexpectedsettleat-7%against6.4%duetoalowerincreaseinbudgetrevenuescomparedtorisingexpenditures.Budgetrevenueswouldgrowby10.9%toaccountfor18.7%ofGDPthankstheexpectedriseintaxrevenuesby13.0%.Thisupturnwouldbeonaccountofeffortsaimedatimprovingrevenuecollection.Totalexpendituresandnetlendingwouldgoupby11.9%toaccountfor25.6%ofGDP.Inall,theoveralldeficitincludinggrantsfortheWestAfricanEconomicandMonetaryUnioninrelationtoGDPimprovedfrom3.1%in2013to2.9%in2014.

68. InWAMZcountries,asharpdeteriorationofthebudgetdeficitexcludinggrantsisexpectedin2014incountriesaffectedbytheEbolavirus,namely,Guinea,LiberiaandSierraLeone.Theepidemicthroughitsimpactoneconomicactivityledtoasignificantdeclineintotalrevenueswhilegovernmentexpenditurewasrisingduetointerventionstocontainthedisease.Guinea’sbudgetdeficitexcludinggrantssettledat6.8%ofGDPin2014against6.7%in2013.InthecaseofLiberia,theoverallbudgetdeficitaspropor-tionofGDPcouldsettleat12.7%in2014against7.2%in2013.InSierraLeone,projectionsindicateanoverallbudgetdeficitexcludinggrantsof8.1%in2014against4.9%in2013.

69. CapeVerdecouldalsoseetheratioofitsbudgetdeficitoverGDPdeterioratefurtherfrom11.5%in2013to12.7%in2014.

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Figure 6 : Overall fiscal balance, excluding grants

Source: Regional Economic Outlook, IMF, Oct 2014

70. Total outstanding debt for the ECOWAS region went up marginally from26.1%ofGDP in2012 to27.50%in2013asresultofariseindomesticdebt.TheoutstandingforeigndebtimprovedduetodebtcancellationobtainedbymanycountriesundertheHIPCinitiative.In2013,thisratiowas9.8%ofGDPagainst10.5%ofGDPin2012(IMF,October2014).OutstandingdebtfortheECOWASregionin2014wouldaccountfor28.10%ofitsGDP.

71. Attheendof2013,thepublicdebtstockaccountedfor37.3%ofGDPagainst38%in2012withinUEMOA.ThispositivetrendislinkedtothebenefitsderivedbyCoted’IvoirefromtheHIPICInitiativeandtheMDRI.Coted’Ivoire’soutstandingforeigndebtdroppedfrom44.8%ofGDPin2012to39.9%ofGDPin2013,representinga4.9pointdecrease.However, it isworthnotingtherapidincreaseinthisratioinsomeMemberStates,particularlySenegalwhoseoutstandingpublicdebtwouldaccountfor46.8%ofGDPin2014.TheUnion’soutstandingdebtandend2014wouldaccountfor37.3%ofitsGDP.

72. Thetotaloutstandingdebtwentupby0.9pointcomparedto2012.Thisdevelopmentislinkedtothelevelofoutstandingdomesticdebtwhichroseby1.5%asaresultoftheinterventiononthefinancialmarketinsomecountries.In2014,theoutstandingdebtofWAMZisexpectedtoshootupmainlyduetotheEbolaepidemicraginginthreemembercountries.Infact,oneoftheeffectsoftheEbolaepidemicistheriseinpublicexpendituresandadeclineintaxrevenuesbecauseoftheslowdownineconomicac-tivity.Forexample,Liberia’spublicdebtgrewby64millionUSdollarsbetweenJanuaryandSeptember2014,from$630.6milliondollarsto$694.8million,indicatinga10.2%increase.

73. InCapeVerde,totaloutstandingpublicdebtremainedveryhigh(99.4%ofGDPin2013against91.3%ofGDPin2012,accordingtotheInternationalMonetaryFund)duelargelytotheexternalcomponent.AsaratioofGDP,CapeVerde’soutstandingforeigndebtaccountedfor68.9%ofGDPin2013against65%ofGDPin2012(WAMA,July2014).In2014,thetotaldebtstockofCapeVerdecouldsettleat110.4%ofGDP.

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2.1.4 Monetary situation

74. In2013,thetrendinmonetaryandinterestratespolicywasmarkedbytheadoptionofflexiblemonetarypoliciesbyallCentralBanks,exceptthatofGhanaandGambia.Theymaintainedtheirkeyratesatsamelevelasin2012ortheybroughttoalowerlevel.

75. Thus,theCentralBanksofNigeriaandCapeVerdemaintainedtheirkeyratesat12%and5.7%%re-spectivelywiththeaimofensuringstableprices.BCEAOandtheCentralBanksofGuineaandSierraLeonerelaxedtheirmonetarypolicy.Therateofthemarginallendingwindowandtheminimumbidratewentdownrespectivelyfrom4.0%and3.5%attheendof2012to3.5%and2.5%atend2013.Onaverage,theCentralBanksofGuineaandSierraLeonereducedtheirkeyratesrespectivelyfrom20%and22%in2012to10%and16%in2013.

76. Incontrast,theCentralBanksofGhanaandGambiareviewedtheirkeyratesupwardrespectivelyfrom15%and13%atend2012to16%and20%atend2013inordertocontaininflationandstabilizetheirexchangerates.

77. Boththerelaxationandtighteningofthemonetarypolicywerereflectedinmostinterestratesexceptsavingsrates.Withrespecttotheninetydaytreasurybills,theresponsewaseffectiveinallthecountriesexceptGuineawheretheinterestratesof90daytreasurybillsclimbedmarginallyfrom15.5%in2012to15.8%in2013despitethereductionofthekeyratein2013.Forcommercialloans,aresponsetotrendsinkeyrateswasobservedinallthecountriesexceptSierraLeonewherecommerciallendingrateswentupfrom21%in2012to22.5%in2013despitetherelaxationofmonetarypoliciesbytheCentralBankofSierraLeone.However,forGambia,despitethetighteningofthemonetarypolicy,commerciallendingratesdippedslightlyfrom16.0%in2012to15%in2013.Intermsofsmallsavings,itwasonlyinGhanathataresponseofthesmallsavingsratetothemonetarypolicywasobservedin2013.

78. Money supply within the Communityexpandedby4.7%in2013against15.0%in2012.Thisdecelera-tioninmoneysupplywasduetothatofNigeriawhichgrewby1.2%in2013against16.4%in2012.

79. AtthelevelofUEMOAcountries,moneysupplyincreasedby10.4%in2013against9.8%in2012.Theexpansioninmoneysupplystemmedfromnetcreditstogovernmentsandtheprivatesector,withcontri-butionsof5.0%and9.6%respectively.Netforeignassetsoffsettheexpansioninmoneysupplyby5.0%.BeninandGuineaBissaurecordedthemostsignificantexpansion,with17.6%and14.8%respectively.Forthesetwocountries,thegrowthinmoneysupplywasduetodomesticcreditsandforeignassets.InMaliandTogomoneysupplyincreasedby5.9%and8.1%respectivelyasresultofthestrengtheningofforeignassetsandcredits to theprivatesector.For theothercountries,namelyBurkinaFaso(10.7%),Coted’Ivoire(11.6%),Niger(10.4%)andSenegal(8.0%),thesurgeinmoneysupplywasasaresultoftheincreaseincreditstotheprivatesectorandgovernments.Generally,theexpansioninmoneysupplyinUEMOAcountriesisduetodomesticcredit,withtheexceptionofBenin,MaliNigerandTogowhereforeignassetscontributedpositivelytotheincreaseinmoneysupply.

80. AttheWAMZlevel,moneysupplygrewby3.1%in2013against16.7%in2012.Thislowgrowthinmoneysupply isdue toNigeria’scontrolovermoneysupplywhichexpandedbyonly1.2%in2013against16.4%in2012.DomesticcreditwasthemainsourcesofexpansioninmoneysupplyinWAMZcountries.

81. Atthecountrylevel,Liberiarecordedthehighestincreaseinmoneysupply,with22.8%.Creditstotheprivatesectorwerethemainsourcesofexpansioninmoneysupplyby20.4%.Ghana, recordeda19.1%growthinmoneysupplymainlyasaresultofdomesticcredits,withcreditstogovernmentcon-tributing14.4%andcreditstotheeconomy15.9%.InSierraLeone,moneysupplygrewby16.6%duemainlytotheconsolidationofforeignassets(10.4%contribution)anddomesticcredits(13.1%contribu-tion).ForGambiaandGuinea,theirmoneysupplyexpandedby15.1%and14.2%respectivelyinlinewithtrendsindomesticcreditswhichcontributed19.9%foreachcountry.

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82. InCapeVerde,moneysupplygrewby15.3%against4.8%in2012.Thisriseinmoneysupplyismainlyduetocreditstothegovernment(4.2%),andtotheprivatesector(6.2%)aswellforeignassets(3.6%).ComparedtoJune2013,moneysupplyexpandedby6.6%onaccountofcreditstotheprivatesectorandforeignassetswhichcontributed1.4%and3.9%respectively.

83. In 2014, if the accommodativemonetary policywithinUEMOA remains unchanged,money supplywouldgrowby9.2%.Thisgrowthwouldbemainlyduea12.3%riseinoutstandingdomesticcredit.Theincreaseindomesticcreditswouldstemfromtherobustlendingtotheeconomy(12.8%)andthedeteriorationofthenetdebtorpositionofgovernment(+340.2billion),reflectingthepersistenceofpres-suresonstatefunds.Theconsolidationofoverallliquiditywouldalsobelinkedtotheincreaseinforeignassetsby10.3billion.

2.1.5 External Account

84. In2013,thecurrentaccountbalanceforECOWASrecordedasurplus(+2.2%ofGDP).Thisimprove-mentismainlyduetotheperformanceofNigeriawhichachievedasurplusof7.4%ofGDPagainst7.3%ofGDPin2012.ThepositionoftheoverallbalanceforECOWASrecordedadeficitof0.4%ofGDPagainstasurplusof2.7%ofGDPin2012,owingtothesignificantdropinNigeria’ssurplus(-0.4%ofGDPagainst4.3%ofGDPin2012).However,therewereimprovementsinsomecountries,includingBenin(2.4%ofGDPagainst1.8%ofGDPin2012),GuineaBissau(2.1%ofGDPagainst-7.4%ofGDPin2012)andCapeVerde(3.5%ofGDPagainst2.6%ofGDPin2012).

85. However,for2013,thecommunity’stradebalancerecordedasurplusof4.9%ofGDPwhichweakenedunderbalanceofgoodsandservicescomponentduetoexportsofgoodsandservicesatarateof33.2%ofGDPandimportofgoodsandservicesatarateof36.1%ofGDP.Thetermsoftradeindexremainedstablefortheregionwith133.0in2013against134.0in2012(IMF).

86. DataavailableontheUEMOAzoneindicatethecontinueddeteriorationofthecurrentaccountbalancefrom-6.6%ofGDPin2012to-7.9%ofGDPin2013asaresulttheworseningbalanceofgoodsandservicesaswellasnetrevenues,withtheeffectbeingoffsetbyanimprovementinnetcurrenttransfers.

87. TheoverallpositionofthebalanceofpaymentofUEMOAMemberStatesrecordedasurplusof0.3%ofGDPfollowingadeficitof0.3%ofGDPin2012.Thistrendismainlyattributedtothestrengtheningofthesurplusonthefinancialoperationsaccount,whoseeffectsweremitigatedbythedeclineinthesurplusonthecapitalaccountandtheworseningofthecurrentaccountdeficit.

88. InWAMZcountries,therewasanincreaseinthecurrentaccountsurplusin2013(4.9%ofGDPagainst+4.3%in2012)inlinewiththeimprovementinthecurrentaccountsurplusinNigeria.

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Figure 7: Current account balance excluding grants (as a percentage of GDP)

Sources: BCEAO, UEMOA, WAMA, 2013, IMF, Africa Department Database (8 October 2013)

89. In2014,externaltradeintheUEMOAzonewouldbemarkedbyanimprovementinthebalanceofcur-rentandcapitaltransactionsthankstoanincreaseincapitaltransfersoffsetbythewideningofthecurrentaccountdeficit.AsapercentageofGDP,thecurrentaccountdeficitexcludinggrantswouldaccountfor7.4%ofGDPin2014.Thefinancialaccountwoulddeteriorateinlinewiththedeclineinexternalre-sourcesmobilizedforforeigndirectinvestmentsandotherinvestments.Thebalanceofpaymentswouldthereforerecordatotalsurplusof10.3billionfollowingadeficitof82.4billionin2013.

90. Ananalysisoftheexternalroomformanoeuvre(measuredintermsthecoveragerateofimportbyex-changereserves)showsunsatisfactoryperformanceinalmostallthecountriesexceptNigeriawhichhasacoveragerateabovetheaverage,i.e.8.9monthsin2013.

Figure 8: FDI flows in 2013 (in millions of $ US)

Source: UNCTAD, 2013

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Box 2 : Economic Impacts of Ebola on Africa OneofthemajordevelopmentsthatmarkedWestAfricain2014wastheoutbreakoftheEBOLAdisease.Theepi-demichadseriousconsequencesintermsoflossofhumanlivesandadversesocio-economiceffects.

ItisagainstthisbackgroundthattheECA,underthecoordinationoftheSubRegionalOfficeforWestAfrica,con-ductedastudywiththeoverallobjectiveofassessingthesocio-economicimpactsofthediseaseonthecountries,theregionandAfricaasawhole,fromtheangleoftheactualcostsincurredaswellasdevelopmentandgrowthprospects in order to make policy recommendations to support mitigation efforts.

Fromaneconomicperspective,theECAstudyhighlightsacontractionineconomicactivityinthethreemostaffect-edcountries,namely:Guinea,SierraLeoneandLiberia.Thiscontractionisduetoacombinationofvariousfactors,includingthedeclineinsalesonmarketsandinenterprises,reducedactivityinrestaurants,hotels,publictransports,construction,educationalinstitutions(causedbygovernmentmeasuressuchasthedeclarationofastateofemer-gencyandrestrictionsimposedonthefreemovementofpersons),aswellasaslowdownofactivityincompanieswhilemanyexpatriatesleftthecountry,leadingtoadropindemandforsomeservices.

Intermsofpublicfinance,theepidemicledtolowrevenuesandincreasedexpenditures,especiallyinthehealthsector,weakeningthestate’scapacitytocontainthediseaseandtostrengthentheeconomyatthesametimethroughfiscalstimulus,forexample.Asregardsinvestments,savingsandprivateconsumption,inthefaceofdwindlingpublicrevenueandincreasedoutlays,thecrisismaydivertpublicspendingfrominvestmentsinphysicalandhumancapitaltohealthandothersocialexpenditures.Foreignanddomesticprivateinvestmentsarealsodecliningintheshortterm,oftenoutofthefear-mongeringpromptedbythedisease.Authoritiesinallthreecountriesarereportedtohavepostponedorsus-pendedinvestmentsinmajorprojects.

Asregardsinflation,currencyandexchangerates,inflationarypressuresweremountingastheepidemicspread,thusunderminingthecompetitivenessofbusinessesandtradersandreducinghouseholds’purchasingpower.Exter-nal assets were substantially reduced and local currencies depreciated as foreign trade tumbled and demand for dollarswasrising.Countries’currencyreserveshavealsobeenhit.

Concerningexternalrepercussions,thoughGuinea,LiberiaandSierraLeonehaverecordedasignificantdropintheirGDP,theimpactsonWestAfricanandonthecontinentasawholewillbeminimalpartlybecause,basedonestimatesfor2013,thethreeaffectedeconomiesaccountforonly2.42%ofWestAfricaGDPand0.68%ofthatofAfrica.

Consequently,iftheepidemicislimitedtothesethreecountries,theextentofitseffectsonGDPandgrowthwillbeveryinsignificant.ECAsimulationsbasedonapessimisticscenarioaccordingtowhichthethreecountrieswouldrecordzerogrowthin2014and2015suggestthattheeffectongrowthforthesetwoyearsinWestAfricawillbe-0.19and-0.15percentagepointsrespectivelyoverthetwoyears.ForAfricaasawhole,theimpactwillbenegligi-ble,with-0.05and-0.04percentagepointrespectivelyoverthetwoyears.

Source: Socio-economic impacts of Ebola on Africa, ECA, Revised Edition, January 2015

2.2 Macroeconomic Convergences Status

91. Onthewhole,themacroeconomicconvergenceprofilewithinECOWASimproved in2013bothintermsofprimaryandsecondarycriteria.Thus,withregardtocompliancewiththeconvergencecriteria,itwasobservedthatagreaternumberofcountriesmetthesixcriteriacomparedto2012.

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Figure 9 : Number of countries that have met the convergence criteria in ECOWAS

Source: WAMA, 2014 * Estimates and ** Projections

92. AccordingWAMAreport(June2014),improvementsobservedintermsofprimarycriteriawereinre-spectofthebudgetdeficitandinflation.Infact,eight(8)countriesmetthecriteriononbudgetdeficit,meaninganadditionalcountrycomparedto2013.AdropintheratioofoverallbudgetdeficitoverGDPwasrecordedinsevencountries,withthemostsignificantbeingobservedinSierraLeone.Asregardsinflation,performanceimprovedslightlycomparedto2012.UEMOAcountrieshaveobservedthiscri-terioninrecentyears.However,inflationremainsabovethecommunitystandardinGhanawheretheinflationratereacheddoubledigitsandwouldexceed15%in2014.

93. PerformanceintermsofbudgetdeficitfinancingbytheCentralBankwassustainedin2013,withfour-teen(14)countriesobservingthestandard.Incontrast,withrespectthegrossexchangerate,therewasnoimprovement,onlyNigeriametthiscriterionaswasalreadythecasein2012.

94. Ananalysisoftheindividualperformanceofcountriesshowthatnoneofthecountriescouldmeetalltheprimarycriteriain2012asin2012,whilethenumberofcountriesthathavecompliedwiththree(3)primarycriteriarosefrom3countriesin2012tosix(6)in2013.Projectionsfor2014indicateasimilarsituationasin2013.

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Figure 10: Performance of ECOWAS countries in terms of compliance with primary criteria

* Estimates and ** Projections Source: WAMA, 2014

95. With regard to secondary criteria, among the criteriawhich recorded an improvement, the nominalexchangeratestabilityistheleadingcriterion,withfourteencountriescomplyingwiththestandardin2013.Thiswasfollowedbyapositivetrendwithrespecttopublicdebt,realinterestrate,nonaccumula-tionofdomesticandexternalarrearsandtoalesserextentdomesticallyfinancedinvestments.However,alltheECOWAScountriesarestrugglingtocomplywiththecriteriaontaxpressurerateandwagebill

Figure 11: Performance of ECOWAS countries in terms of compliance with secondary criteria

Source: WAMA, 2014 * Estimates ** Projections

96. Overall,alltheECOWAScountriescouldnotmeetalltheelevencriteriain2013.ThebestperformancewasachievedbyNigerwhichobservednine(9)convergencecriteria,followedbyBenin,BurkinaFaso,Coted’Ivoire,MaliandSenegalwitheight(8)criteriaeach.However,thelowestperformancewasre-cordedbyGambiawhichmetonlytwocriteria,followedbyGhana,withfour(4)criteriaobserved.In2013,themostsignificantimprovementsweremadebyGhana,BeninandMali,whichcompliedwithtwo(2)additionalcriteriacomparedto2012.Ontheotherhand,Gambiaobservedtwo(2)criterialesscompared to 2012.

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Figure 12: Total number of convergence criteria achieved per country

Source: National Authorities; WAMA

2.3 Economic prospects for ECOWAS countries in 2015

97. InWestAfrica,economicgrowthwouldbeconsolidatedat6.9%against6.3%in2014(IMF2014).WithregardstoUEMOA,agrowthrateof7.2%isexpected.ThisfavourableprospectisduetotheexpectedexpansionintheenergyandtransportsectorsinSenegalandNigerandinallsectorsinCôted’Ivoire.ItwouldalsobesustainedbytheexpectedpositiveimpactofeconomicrecoveryinMaliandtheconsoli-dationofactivityinNigeria,consideringtheprominentroleofthecountryintheGDPofWestAfrica,nearly75%.Accordingtoprojections,mostofthecountriesintheregionwillrecordhighgrowthwhichshouldexceed8%onaverageinCôted’Ivoireandreachover7%inNigeriathankstothedynamisminthenon-oilsectorandtherecoveryinoilproductionprovidedthatflight-relatedandpipelinesshutdownproblems are gradually resolved.

98. TheaverageinflationrateintheECOWASregionwouldrecordaslightdeclinetosettleat7.9%in2015against8.6%in2014.ThelowestinflationlevelswouldbeobservedintheUEMOAareawhereaverageinflationcouldbearound2.3%in2015partlyduetothefallinoilprices.However,inGhana,inflationwouldbehighandremainatadoubledigitor15.1%,mainlyasaresultofpastcurrencydepreciationsandfuelpriceadjustments.

99. In2015,publicfinanceswouldremainfragileduetotheprioritygiventopublicinvestmentinsocialsectorsandinfrastructureinacontextofreducedroomformanoeuvretoincreasethetaxpressure.Theoverallfiscalbalance includinggrantsandoverallbalanceexcludinggrantsshouldsettleat -2.6%ofGDPand-3.1%ofGDPrespectively for thewholecommunity in2015(IMF,2014). InUEMOA, thedeficitinbothbalancesisexpectedtobe3.3%ofGDPand6.7%ofGDPrespectively.

100. ThechallengingsecurityconditionsinsomeSahelcountries(especiallyMali,Niger)andnorthernNige-riaandtheEbolavirusdiseaseoutbreakwillremainmajorthreatstoeconomicprospectsin2015.

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2.4. Risk analysis

101. Thisanalysis focusesonWestAfrica’sperformanceinrelationtoreferenceindicatorsandrankings intermsofthebusinessenvironment,goodgovernanceandhumandevelopment.

102. Regardingthebusinessenvironment,WestAfricaexperiencedanimprovementinthe‘DoingBusinessIndex’oftheWorldBankovertherecentperiod.Thisrelativeperformancewasdrivenbytheprogressin the regulatorybusinessenvironment in2013/2014 forcompanies inBenin,Côted’Ivoire,SenegalandTogo.However,withtheexceptionofGhana,ranked70thaccordingtothe2015‘DoingBusinessReport’,mostWestAfricancountrieswereinthebottomhalfofthecountriesintermsofimprovementinthebusinessclimate.

Figure 13: Gap between the highest and the lowest score in terms of business climate in 2015

Source: Doing Business Database, 2015

103.Withregardstogovernanceassessments,WestAfricarecordedanaveragescoreof52.2onascaleof100accordingtorankingsmadeonthebasisoftheMoIbrahimIndexandremainstheregionadvancingthemost.Indeed,since2004,thebestperformancehasbeenrecordedinWestAfricawithLiberia,SierraLeoneandTogoamongthetopthree.Since2009,Côted’Ivoire,GuineaandNigerhavereversedthenegativetrendtobeaheadofthecountrieswithbestscoresinthelastfiveyears.In2014,threecountriesrecordedagoodperformanceintheregionandtheyareamongthetopten.TheseareCapeVerde,Ghanaand Senegal.However, this region is still facing challengeswith good governance including severalpoorly ranked countries in terms of overall governance. A review oftheaveragechangeintheoverall«MoIbrahimIndex»andtheaveragelevelofgrowthforECOWASMemberStatesovertheperiodfrom2000to2010showedapositivecorrelationofabout0.72,orarelativelystronglinkbetweenprogressintermsofgoodgovernanceandeconomicgrowth(ECOWAS,2014).

2 Correlationratecalculatedbetweenaveragegrowthrateofcountries(2001-2009)andtheaveragechangesintheIbrahimIndexbetween 2000 and 2010 in index points

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Figure 14: Average score for effective governance (Mo Ibrahim Index) by region, 2014

Source: Mo Ibrahim Foundation, 2015

104. In termsofhumandevelopment,withanaveragedevelopment indexof0.450 forWestAfrica,mostcountriesintheregionareinthecategoryofcountrieswith«lowhumandevelopment»,withtheex-ceptionofCapeVerdeandGhanawhichclassifiedinthecategoryofcountrieswith«averagehumandevelopment».

Figure 15: Average score of the human development index in West Africa compared to other re-gions, 2014

Source: UNDP, 2015

105. ThefightagainstcorruptionisamajorconcernintheWestAfricanregionandcanbeassessedinvariousways.Intermsoftransparencyandcombatingcorruption,CapeVerdeoccupiesaprominentplaceinWestAfricaandisranking42ndatthegloballevelaccordingtoTransparencyInternational,withascoreof57againstanaverageof34.73forWestAfrica.GhanaandSenegal,ranked61and69respectivelyoutof175in2014,improvedtheirscoreswithincreasesof3and7pointsontheirrespectivescoresbetween 2012 and 2014.

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Table 1: Corruption Perceptions Index in West Africa

Country Score /100 (2012) Score /100 (2013)

Score /100 (2014) Rank/175 (2014)

Benin 36 36 39 80

Burkina Faso 38 38 38 85

Cape Verde 60 58 57 42

Côted’Ivoire 29 27 32 115

Gambia 34 28 29 126

Ghana 45 46 48 61

Guinea 24 24 25 145

Guinea-Bissau 25 19 19 161

Liberia 41 38 37 94

Mali 34 28 32 115

Niger 33 34 35 103

Nigeria 27 25 27 136

Senegal 36 41 43 69

SierraLeone 31 30 31 119

Togo 30 29 29 126Source: Transparency International, CPI Index 2014

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III. Social situation and youth employment issues in West Africa

3.1 Social situation

106.Africa’sprogresstowardsachievingtheMDGshasbeenacceleratedinrecentyears.Althoughtheconti-nentisontargettoachieveonlytwoofthegoals,MDG2(Ensuringuniversalbasiceducationforall)and3(Promotinggenderequality),thepovertyrateisdecliningwithinacontextofrelativelysteadygrowth.

107. PovertyisthereforedeclininginWestAfricaaccordingtothe2014MDGreport(ECAetal2014a).Themajorityofthepopulationlivinginextremepoverty(withlessthan$1.25perday)decreasedfrom56.5%in1990to48.5%in2010inWestAfrica.MDG1whichfocusesonreducingbyhalfthenumberofpeoplelivinginextremepovertyby2015presentedamixedsituationinthesub-region,asitisattainedbyGuineaandthereareprospectsthatthisgoalwillbeachievedbyGambia,Ghana,Mali,NigerandSenegal.However,Côted’IvoireandNigeriaarenotexpectedtoachievethisgoal.

108. Thegainsmadeonthepovertyfrontwereextendedtohealthandeducationsectors,showinganaverageimprovementoftheHumanDevelopmentIndexforallWestAfricancountriesby1%inthe1980s,0.7%inthe1990sand1.5%since2000.

109. Itshouldbenotedthatprogressintermsofaccesstohealthandeducationishigherthanwhatisachievedintermsofpercapitaincome,withanincreaseinthehealthandeducationindicesby1.4%between2005and2012,against1%fortheincomeindex.

110. Regardinggenderpromotion,significantprogresshasbeennotedacrossSub-SaharanAfrica.Women’sparticipationinpoliticsisatellingindicator:with21%offemalerepresentativesinnationalparliaments,orthedoublingofthisfigureinbarelyadecade(IPU,2014).Intermsofeducationalperformance,thenumberofgirlsoutofschoolhasreducedconsiderably:thoughmorethanhalfthenumberofchildrenoutofschoolinSub-SaharanAfricaaregirls,theirnumberfellfrom24to9millionbetween2000and2013(ISU,2014).In2012,almosthalfoftheAfricancountriesachievedgenderparityinprimaryeduca-tion.

111. Theperformanceobtainedforsomeindicatorshasnotyet resultedinaradical reversalofgender in-equalitiesintermsofaccesstoandcontrolovereconomicresources.AccordingtotheILO,in2012,womenwerealargemajorityamongtheholdersofpositionsthatarevulnerable,poorlypaidandwithexploitative working conditions.

112. UNDPGenderInequalityIndex(GII)for2012highlightstheeffortsthatAfricamustmaketoensureequalrightsforwomenandpromotetheireconomicandsocialempowerment.Thisindexhighlightsgenderconstraintsintermsempowerment(participationinpubliclifeandaccesstohighereducation),labourmarket(employmentrate)andreproductivehealth(maternalmortalityandfertilityrate).

113.Improvedwomen’saccess toeducation, includingpostsecondaryandhigher levels,canincrease in-come-generationopportunitiesandstrengthenhumandevelopment.InWestAfrica,countrieswiththehighestGIIareNiger(70.7),Mali(64.9),BurkinaFaso(60.9),Togo(56.6)andGhana(56.5).

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3.2 Labour market and social exclusion of young people in West Africa

114. Socialexclusionisamultifacetedconceptwhichhasundergonemanychangesfromaconceptualpointofview.ItemergedfirstinFrancein1974andreferredtoacategoryofunemployedindividuals,childrenindifficultsituations,drugaddicts,criminals)describedas“socialcases”whoenjoyednosocialprotec-tion.Today,theconceptofsocialexclusionhasevolvedanditiscloselylinkedtotheconceptofpoverty.Socialexclusionhasbecomeamultidimensionalconceptofpovertywhichincludes,inparticular,thesocialparticipationandrespectforhumanrightsinsociety.Beyondatheoreticalconcept,socialexclu-sionisanotionwhichissimilartoanintolerablesituationandadeepsenseofinjusticefacingallsocie-ties.Italsorevealsthefailureofthestatewhichisunabletosatisfythebasicsocialneedsandtomobilizedomesticresourcestoreducethescaleofsocialproblems.

115. ThreedimensionsofexclusioncanbeidentifiedintheAfricancontext:i)exclusionfromsustainablelive-lihoods,ii)exclusionfromaccesstobasicgoodsandsocialservicesandiii)exclusionfromsocialrights.Youthunemploymentisoneoftheleadingformsofexclusionanditforcesyoungpeopletobecloselylinked to poverty in Africa.

116.WestAfricahasrecordedoneofthehighestgrowthratesinrecentyearsinAfricaandeventheworld.However, levelsofunemploymentandpovertycontinuetobeasourceofconcern.DeonFilmerandLouiseFox(2014)pointoutthattheurbanyouthhaveexpressedtheirdissatisfactionandthaturbanpro-testsledmainlybythepoliticallyactivebuteconomicallymarginalizedyouthareincreasinginAfricancapitals.

117. AccordingtotheWorldBank(2009),urbanviolenceisprobablyduetomoregeneralfactorsthantheem-ploymentsituation(suchasinequalityandexclusion)confrontingyoungpeopleandthegapbetweentheexpectationsoftheyoungpeopleandemploymentopportunitiescancontributetoit.InAfrica,theratioofyouthunemployment /adultunemployment (ILO2006) ranges fromone to three, thisclearlydenotesthespecificchallengesthathinderyouthparticipationinthelabourmarket.

118. TheissueofyouthemploymentremainsamajorconcernofpoliticalleadersinWestAfrica.Indeed,«highgrowthisnotsufficienttoguaranteeproductiveemploymentforall.Vastsegmentsofthepopulation,especiallyyoungpeople,mayfindthemselvesleftbehindandfrustrated.Intheabsenceofapoliticalprocessthatenablesthemtoexpressthemselvesandinfluencepublicpolicy,theyconstituteathreattostability,aswasthecaselastyearinseveralNorthAfricancountries.ThetimehascometoredirecttheagendaofAfricancountriestowardsastrategyconducivetoaninclusive,jobgeneratingandsustainablegrowth,withtheprimarygoalofmeetingthespecificneedsofyoungpeople»3.

119. ItisagainstthisbackgroundthattheanalysisoftheyouthlabourmarketinWestAfricawasconductedtohighlightthefactorsbehindtheirexclusionandproposesolutionstoaddressthem.

3.2.1 Mapping of the situation of young people on the labour market in West

Africa

Sector of activity and types of jobs for young people

120. InSub-SaharanAfrica,«salariedemployment»,meaningjobsforwhichworkersreceiveregularsalaryandsometimesothercomplementarybenefits,accountforonlyabout16%ofjobs.Therestofthejobsareprovidedthrough«familyfarms»(62%)and«individualbusinesses»(22%).Thesecanbeconsid-eredastheinformalsectorandgenerallyincludeworkonasmallplot,sellingvegetablesinthestreet,dressmakingathome.Theseactivitiesoftengeneratesmallincome,partlybecausethese«businesses»

3 InternationalLabourConference(2012),101stsession,«Youthemploymentcrisis:Timeforaction»andAfDB,OECD,UNDPandECA(2012),Issue«PromotingYouthEmployment»,AfricanEconomicOutlook2012Report.

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tendtobeverysmallandusuallyinvolveonlythefamily.Youngpeopleworkmostlyinagriculturewheretheyoccupy65%ofjobs(ILO,2007).

121. MostofthejobsavailabletoyoungpeopleinGhana,MaliandSenegalareunstablejobs(table1).Theunstableemploymentrateofyoungpeopleinthesecountriesis75.5%,94.6%and88%respectively.Meanwhile,Nigeriahasarelativelylowunstableemploymentrateamongtheyouth(25.5%).

Table 2 : Salaried employment and unstable employment among young people in West Africa

Salaried Employ-

mentSelf-employ-

ment Family work Others TotalUnstable employ-

ment

Ghana 13.3 26.2 50.4 10.2 100 75.6

Mali 5.4 41.6 53 0 100 94.6

Nigeria 72.6 17 8.5 1.9 100 25.5

Senegal 12.3 41.7 46 0 100 88

Source: Working Population Surveys (EPA) 2002-2007. Extract from the AfDB Report on Youth Employment in 2012.

Disparity based on pathways followed

122. TheWorldBank(2009)reportstatesthatinAfrica,youngpeoplefollowtwotypesofpathwaysfortheirtransitionintoworkinglife:manyofthembegintoworkdirectly,havinghardlyreceivedformaleduca-tion,whileothersentertheworkforceafterafewyearsofstudiesintheformaleducationsystem.Youngpeopleenteringthelabourmarketdirectlyhaveahighprobabilitytoremainconfinedtolow-productivityjobsandaremoreaffectedbychangesinthedemandforlabour.

Disparity between young people and adults

123.Youthunemploymentrateisoftenhigherthanthatofadults.Forexample,thesurveybasedharmonizedindicatorsprogram(SHIP)showsthatyouthunemploymentstoodat31.3%against8.7%foradultsinGhanain1998whileinSierraLeone,theyouthunemploymentratewas52.5%against10.2%foradultsin2003.TheILOreport(2010)estimatesmoregenerallythatinSub-SaharanAfrica,theyouthunemploy-mentrateisabout1.9timeshigherthanthatofadults.Theprobabilityofyoungpeopleworkingintheinformalsectorishigherthanthatofadultswhilethelikelihoodthatoftheyouthbeingsalariedworkersorself-employedislower.TheAfDBreport(2012)alsostressesthatadultsaremorelikelytobepartofthespecializedprofessionorheadacompany,reflectingthemoredifficultconditionsofaccesstothesetwooccupationalcategoriesandthescarcityofopportunitiesforyoungpeople.

Disparity based on place of residence

124. Theprevalenceofyouthunemploymentishigherinurbanareasandamongthosewithhighereduca-tionallevel.Bywayofillustration,accordingtothesurveybasedharmonizedindicatorsprogram(SHIP),unemploymentamongurbanyouthwas36.7%against27.4%for ruralyouth inGhana in1998.Onaverage,unemploymentoftheyouthwithsecondarylevel(orhigher)educationismuchmoresignificantthan thatofuneducatedyouth.Theurbanyouthhavemoreeducationalopportunities, stay longer inschoolandentertheworkforcelaterthantheruralyouth.Youngpeopleoftenfindthemselvesworkingforlonghourswithintermittentandunstablejobs,characterizedbylowproductivityandlowerwages.Theprevalenceofunderemploymentisstrongeramongyoungpeoplethaninadultsandintheruralareasthanurbanareas.

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Disparity based on gender

125. Theunemploymentrateamongyoungwomenishigherthanthatofyoungmen.Forexample,inSenegal,71outof100unemployedyoungpeoplearewomen.Unemploymentrateamongyoungwomenwas19%againstarateof8.3%amongyoungmenaccordingtotheESPS-II2011report.ThissituationisthesameinCôted’Ivoire.In2012,femaleyouthunemploymentratestoodat53.2%against46.8%foryoungmen(AGEPE,2014).

3.2.2 Factors contributing to youth exclusion on the labour market in West Africa

Low demand for labour in the public and private formal sectors

126.Inrecentyears,Sub-SaharanAfricaexperiencedstrongeconomicgrowthaccompaniedbyjobcreationbut the jobsarestill insufficient toabsorb themajorityofunemployedyouthdue tohighpopulationgrowth.Kapsos(2005)showsthattheelasticityofyouthemploymentinrelationtoGDPgrowthinSub-SaharanAfricahasdeclinedconsiderably.Indeed,itstoodat0.62overtheperiod1999-2003against0.90overtheperiod1995-1999.

127. Therateof jobcreation inAfrica is still insufficient toabsorb thismassofunemployedyouth (AfDB,OECD2012):

128. Overtheperiod2000-2007,theworkingagepopulationincreasedby21%(2.6%annually)inAfricaovertheperiod2000-2007whileemploymentgrowthclimbedevenmoreby23%or2.9%peryear.Intermsofabsolutevalue,theworkingagepopulationroseby96millionpeoplewhilethenumberofjobswentupbyonlyby63million.

129. Consideringthateachyear,10to12millionyoungpeoplearriveonthejobmarketinAfrica,growthinemploymentshouldbemuchmoresubstantialtosignificantlyreducethenumberofunemployedanddisillusionedyouth.

130.InWestAfrica,afteryearsofindependence,thepublicsectorplayedtheroleofthemainproviderofjobs.ButwiththeadventoftheIMFstructuraladjustmentprogrammesandtheimplementationofvariousgov-ernmentrestructuringandfiscalconsolidationprogrammes,thenumberofpublicsectorjobsfellsharply.Thisdeclineinformalemploymentopportunitieswasexacerbatedbyweakjobcreationcapacityoftheformalprivatesector.Thishasledtothecreationofinformalandunstablejobsinacontextofincreasedpressures on labour supply.

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Box 3 : Senegal, a country with insufficient employment capacity in the private sectorThehighunemploymentandunderemploymentratesuggeststhatthereisashortfallinthecreationofnewjobs:about100000graduatesofhighereducationenterthelabourmarketeachyearandlessthan30000employmentcontractsarerecordedbytheofficeoflabourstatistics.

AccordingtothesurveyconductedaspartoftheYEN/YIF(2009)studyin378privateenterprisesin26keysectors,10264jobswerecreatedforyoungpeoplebetween2010and2014,including6183temporaryjobs.Thehugenumberofthesetemporaryjobsreflectsthetendencyofemployerstooutsourceservicesformoreflexibility.

Thus,theformalprivatesectordoesnotprovidesignificantjobopportunities.AccordingtotheIMF(2010),thevol-umeofjobsintheformalsectorhasstagnatedoverthepast15years:theinformalsectoristhemajorjobcreationsector.TheWorldBank(2007b),YEN/YIF(2009)studyandtheNationalCompetitivenessReportofSenegal(2011)estimatedtheshareoftheinformalsectorinthejobscreatedatbetween80to97%.TradingisthemainbusinessoftheurbaninformalsectorinSenegalandthemainsourceofemploymentinthesuburbswithalargepopulationofstreetvendors.USAID(2011)showsthatthevastmajorityofyoungSenegalesebelievethattheinformalsectorcouldnotbeabetterfinaloptionandacceptatemporaryactivitypendingaformalemployment.

Source: Country Note - Senegal, AfDB & OECD (2012)

Work experience : a constraint to the integration of young people

131.Oneofthesimplestquestionstoaskisthis:howcanonehaveexperienceifcompaniesrequireonlypeo-plewithworkexperience?ThisistheproblemfacedbymanyyoungpeopleinWestAfrica.Employersarereluctanttoemployyoungpeopleintheircompanies.Oneofthemajorcausesisthattheydonothaveworkexperience.Therealproblematthislevelisthattheeducationsystemprovidesskillstolearnersandthecompaniesusethefruitsoftheeducationsystemaftertheirgraduation.However,tobemoreproduc-tive,thereshouldbetimeforin-servicetraining.Thelearningtimehasacostelementandthelearnerislessefficientduringthatperiod;thisisthetrainingstage.Thecompanyprovidingtrainingalsorunsarisk.Attheendofthetraining,thelearnermayleavethecompany.Thisiswhycompaniesrequirepeoplewithworkexperience.Intheabsenceofacoordinatedpolicyonprofessionaltraining,internshipsinvolvingtraininginstitutions,governmentsandcompanies,thispracticeisexpectedtocontinue.

Assignment of jobs by affinity

132.Theperceptionthatyoungpeoplehaveofthelabourmarketdefinestheirdeterminationtobeintegratedintoitorexcludethemselvesfromit.Thisperceptionisasignalwhichcanbeeitherpositiveornega-tive.Regardlessofthestateoftheperception,itconditionsthemindoftheyoungpersononthelabourmarket.AccordingtotheAfDBandOECDreportonyouthemployment2012,inadditiontothescar-cityofemployment,themainconstraintmentionedbyyoungpeopleisthatgettingajobisessentiallythroughacquaintances(wellplacedindividuals).AfDBpointsoutthatthispracticeofgivingpositionstoacquaintancesclearlyindicatesthatjobsdemandingspecifictechnicalskillsarerare.Onastronglabourmarket,employerscompeteoverworkersandtheymustdeployvariousmeanstoattracttheworkforcetheyneed.Itisonlyinacontextofexcessivesupplyofyoungentrantsuntothelabourmarketthatem-ployerscanrelyontheiracquaintancestofillpositions.

Education and skills mismatch

133.Amajorobstacle to theintegrationofyoungpeopleintothelabourmarketstemsfromthemismatchbetweentheskillsprovidedbytheeducationalsystemandthoserequiredbycompanies.Thedichotomybetweenthesetwosectorsincreasesunemploymentamongyounggraduates.Trainingattheuniversityandprofessionallevelshavenotundergoneanymajorreformstoaddresstherequirementsofthelabourmarketwhichhavechangedsignificantlysincetheperiodofindependencetothepresentday.Asurvey(AfDB&OECD,2012)conductedaspartofitsreportonemploymentinnineAfricancountriesamongrecruitmentandtemporaryworkagenciesindicatesthattheseagenciesfinditmoredifficulttogetcandi-dateswhohavecompletedtertiaryeducationwhoaresuitableforSouthAfricaandTunisiathanthelow-

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incomecountriessuchasKenya,GhanaorevenNiger.Thissurveyrevealsthatdespitethepersistenceofhighyouthunemployment,therearevacanciesduetolackofrequiredskills.

134.Unemploymentalsostronglyaffectsyoungpeoplewithsecondaryeducation.Secondaryeducationinmostcountriesisquitegeneralandnotorientedtowardsthespecificsofthelabourmarket.Whenyoungpeoplecomeoutoftheeducationalsystematthislevel,theyfindthemselvesconfrontedwiththeharshrealitiesoftheworldofworkthataretotallydisconnectedfromthetrainingreceived.

135.AccordingtothereportoftheIvorianObservatoryoftheAgencyforEmploymentStudiesandPromotion(AGEPE)ontheemploymentsituationin2012,longstudiesseemtobeanobstacletogettingajob.In-deed,theyoungunemployedhavehigherlevelofeducationthantheemployedyouth.ThisreportpointsoutthatinCôted’Ivoire;thereiscurrentlynopropermatchbetweentherealitiesofthelabourmarketandthetrainingsystems.

136.InaninterviewwithIRIN(IntegratedRegionalInformationNetwork)in2014onthetheme,«Breakingthecycleofyouthunemploymentandpoverty»,thedirectoroftheECOWASGroupofeconomicpolicyanalysissaidthatinAfricayoungpeople’sskillsdonotmatchmarketdemands.HepointedoutthatAfricahasnotsucceededintrainingitspopulationtomeetitsneedsbuthasrathertrainedyoungAfricanstomeettheneedsofothers.Forexample,hestressedthatinSenegal,theagriculturalsectoremploysnearly80percentoftheworkforcebutthemajorityofuniversitygraduatesstudiedinfieldssuchaseconomics,humanities,socialsciencesandinternationalrelations.Althoughtheseareasareimportant,theymakeyoungpeopleunemployedorunderemployediftheyremaininAfricaorpushthemtomigratetotheUSor Europe.

Inadequate search for jobs and relative ineffectiveness of information systems on the job market

137.Jobsearchisanessentialcomponentforallpeopleenteringthejobmarket.Thisgoesbeyondtheacquisi-tionofknowledge.Tobettermarketone’sknowledge,onemustfirstfindavacancy.Jobsearchmeanstheyouthmustsearchforinformation.Thus,jobsearchstrategyiscrucialintheaccesstoemployment.Inthelabourmarketeconomics,itisrecognizedthatinadequateinformationisoneoftheimportantelementsresponsibleforthefrictiononthelabourmarket.Onthelabourmarkettwoleadingactorsco-exist:thecompaniesofferingemploymentandtheunemployedjobseekers.Companiesarelookingforinformationontheworkerswhoarequalifiedtofillthevacanciescreatedandtheunemployedexploretheemploy-mentareasinsearchforinformationonthesepositions.Themorethesetwoactorsonthelabourmarketareactiveintheirefforts,thehighertheprobabilitythatthejobsarematched.

138.Jobsearchasinformationgatheringprocesshasseveraladvantages:i)itreducesfrictiononthelabourmarketandincreasestheprobabilityofgettingajob;ii)ithelpstodetectthesignalssentoutbythecom-panies,iii)itallowsjobseekerstoknowtheprofilessoughtbycompaniesandiv)ithelpstodevelopastrategytolearnaboutthebehaviourofemployersandtheircompetitorstoadapttojobsandtoincreaseone’schancesforintegration.

139.Theliteratureshowsthatgettingajobisoftentheresultofintensivejobsearchefforts(BarronandMel-low,1979;Pissarides,1984;Sabatier,2002;WahbaandZenou,2005;WasmerandZenou,2006).

140. In2000,asurveyontheexclusionfromtheurbanlabourmarketinGuinearevealedthatthemainjobsearchmethodispersonalrelationshipswithaproportionof51%.Thisshowslackofjobsearchstrategybutithighlightstheroleofaffinitiesintheallocationofpositions.

141. InCôted’Ivoire,theobservatoryoftheAgencyforEmploymentStudiesandPromotion(AGEPE)showsthatin2008,73%ofunemployedpeopleinAbidjanhadnotmadeanyjobsearchefforts.Thereasonsgivenaremainlylackofqualification,despondencyandlackofknowledgeinjobsearchtechniques.Moreover,amongthejob-seekers,veryfewunemployedpeoplecombinejobsearchmethods.Themainmethodistheuseofpersonalrelationships(relatives,friendsandacquaintances),asiftheunemployed

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seektoavoidthequeuesimposedbythemarketprocedures(directcontactwithcompanies,responsestoadvertisements,etc.).

142. Thissituationappears topersist inCôted’Ivoire. Indeed, theAGEPEreportontheemploymentsitua-tionin2012alsoshowsthatpersonalrelationshipsisthemainjobseekingmethodoftheunemployed(68.7%),moreforfirst-timejob-seekers(70.6%)andforthecityofAbidjan(73.2%).

143.InSenegal,personalrelationshipswerebyfarthemainstrategyusedbytheunemployedtofindjobsin2011.Infact,nearly58%ofunemployedpeopleusedthisstrategytogainaccesstoemployment.Ap-plicationstocompaniesareverycommonand22%oftheunemployedusethismedium,6%useadver-tisementsinthemediaand5%ofthoseseekingfunding.Stateinstitutionsforemploymentpromotionareveryrarelyused.Only1%oftheunemployedusetheDirectorateforEmploymentandaverysmallproportion (less than0.1%)solicithelp fromtheNationalAgency forYouthEmployment (ANEJ).ThislackofjobsearchcultureseemstobewidespreadinAfrica.InNorthAfrica,theyouthdonotseemtobelievethatlackofknowledgeoncareeropportunitiesisasignificantobstacle(AfDB,OECD,2012).InAlgeria,forinstance,41%ofrespondentsbelieveaccesstoemploymentisdeterminedbypersonalorfamilyrelationships.

144. Theavailabilityofalabourmarketinformationsystemfacilitatesthemeetingbetweenjobprovidersandjob-seekers.Youngpeopleoftendonotknowwheretofindinformation.Thesestructurescanguidetheyouthinjobsearchandrefinetheirjobsearchstrategies.WiththedevelopmentofcomputersandlowpenetrationofICTsinAfrica,onlytheeducatedandrelativelyaffluentyoungpeoplehaveeasyaccesstoinformationonthelabourmarketviainternet.Therefore,thelackofinformationsystemisdetrimentaltoyoungpeople,inparticular,thedisadvantagedyoungpeopleseekingjobs.Kluve(2006)showsthatinEurope,jobsearchassistanceismoreeffectiveforindividualswhoaresufficientlyeducatedandhavebetterprospectsonthejobmarket,andlessforthedisadvantaged.

3.2.3 Consequences of the exclusion of young people from the labour market

Risk of political instability in West Africa

145. OneofthethreatsthatcouldputWestAfricaatriskduetothehighrateofyouthunemploymentispoliti-calinstability.Thisregionincludesmanycountriesthathaveexperiencedconflicts.MaintainingpoliticalstabilityhasbecomeapriorityforECOWASbecauseaconflictinamemberstatehasseriousrepercus-sionsonthepoliticalandmacroeconomicstabilityaswellasthebusinessclimateintheentireregion.Now,itiswidelyacceptedthatinfragilestates,thelackofadequateemploymentisamongthemajorthreatstostability(seeBox3).Theyouthemploymentchallengegoesbeyondthenationalboundarybe-causeitcanhaverepercussionsontheoverallstabilityoftheregion.

Box 4 : Relationship between youth unemployment and political instability in fragile states Why is youth unemployment a critical issue in fragile states?

Ifnon-violentpoliticalinstrumentsarenotadequateorresponsive,youngpeoplemayexpresstheirgrievancesthroughviolence(USAID,2006).Thesegrievancesrevolvearoundunemploymentanditsimpactonincomeandsocialcohesion.Amongyoungpeoplewhojoinedinsurgentmovements,oneoutoftwosaidthatunemploymentwasthemainmotivation(WorldBank,2011b).Thus,Liberiahaswitnessedtwocivilwarssince1989,fuelledbyanexplosivemixtureofethnicdivisions,predatoryelites,corruptionandtheracefortheprofitsfromnaturalresources.However,unemploymentisconsideredasthemainthreattothestabilityinthiscountrytoday(InternationalCrisisGroup,2011).Inaddition,whenconflictsrageinacountry,theannualgrowthrateofneighbouringcountriesisslashedby0.5percentagepoint(Collieretal.2003).Conflictcangenerateapopulationofrefugees,disrupttrade,triggeranarmsrace,providerefugeforinsurgentsandcanitselfbecomethetheatreofanewwar.

Source: International Network on Conflict and Fragility (INCAF), Development Cooperation Directorate of OECD, culled from AfDB report on youth employment

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High poverty rate among young people

146.Oneofthedirectconsequencesofyouthunemploymentispoverty.Onaverage,72%ofyoungAfricansliveonlessthanUS$2perday.TheincidenceofpovertyamongyoungpeopleinNigeriaisover80%(table2).Highprevalenceofpovertyisobservedamongyoungwomenandtheyouthinruralareas.

Table 3: Incidence of poverty among young people in West Africa

County Less than $2 a day (PPP)

Côted’Ivoire,1998 46.5

Ghana,1998 66.5

Nigeria,1996 92.9

SierraLeone,2003 68.0

Source: World Bank Programme on Survey based Harmonized Indicators (SHIP), culled from Africa Development Indi-cators 2008/09

Difficulty of integration into the labour market

147. TheWorldBankReport (2014)onyouthemployment inSub-SaharanAfrica shows thatwhenyoungpeopledonotfindwork,theriskofbeingunemployedinadulthoodincreasesaswellastheirlikelihoodofbeingpoorlypaidlater.Indeed,duringthefirstyearsonthelabourmarket,theskillsdevelopedandtheexperienceaccumulatedareessentialforfutureprofessionaldevelopmentofyoungpeople.Italsoprovidesasignalontheexpertiseoftheapplicantforcompanies.OtherstrikingfactorswhichexplainthisdifficultintegrationofyoungpeoplehavebeenrevealedbytheAfDB,OECD(2012):

» Longperiodsofinactivityorunderemploymentintheinformalsectorcanadverselyaffecttheproduc-tivepotentialandthereforeemploymentopportunities(Guarcelloet al.,2007).

» Forthefewpeoplewhomanagetogetjobsintheformalsectorwhereinitialsalariesincrease,theinitialperiodof inactivitycanhavesignificantadverseeffectson the incomeacquired throughouttheirlives(OECD,2010).

Vicious cycle of poverty and exclusion from the labour market

148. Thereisaself-perpetuatingnatureoftherelationshipbetweenyouthpovertyandexclusionfromthela-bourmarket.Theirexclusionfromthelabourmarketdeprivesthemofafairlystableincomeandmakesthemmorelikelytobehitbypoverty.Youthpovertyisanobstacleinfindingadecentjob.Asmentionedabove,jobsearchdeterminestheentryintothelabourmarket.Veryoften,thejobsearchinvolvescoststhatthesepooryouthcannotcopewith.

3.2.4 Actions to facilitate the integration of young people into the labour market

149. ThevariousstrategiestobeputinplacetoaddresstheyouthemploymentchallengeinWestAfricacanbeimplementedattwolevels:actionstobeundertakenatthenationallevelandthoseattheregionallevel.

National level

• Agriculture

150. Theagriculturalsectorabsorbsthemajorityofyouthemployment.Youngpeoplearethereassmallholderfarmers.However,itisnotedthatagriculturalproductivityislowerinAfricathananyotherregionintheworldandagricultureistheleastproductivesectorinAfricaneconomies(DeonFilmeretLouiseFox,2014).Thislowproductivityisattributabletothefollowingfactors:

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» Smallholderfarmerscannottakeadvantageoftheeconomiesofscaleorothertechniquestoincreaseproductivitybecausetheyworkinmostcasesonsmallplotsoflandwithuncertainlandtenure.

» Lackofruralinfrastructure(transport,electricityandirrigation)leadstoadditionalcostsofinputsandlossofcompetitivenessoftheirproducts.

» Smallholderfarmershavedifficultyinaccessingcredittofinancetheiractivities. » Theruralyouthusuallyhavelowerlevelofeducationthantheurbanyouthandthiscouldhinderthe

adoption of best practices to increase productivity.

151. Thevariouspoliciestobeimplementedatthislevelwillaimatincreasingproductivityintheagriculturalsectortomakeitmoreattractiveandimprovetheincomeofthosewhoarethere.Actionsmustalsoin-cludetheremovalofconstraintsassociatedwithfinancialservicesandcredit,landpolicy,infrastructure,skillsaswellasthelackofqualifiedpersonnel.

• Individual companies

152. Manyyoungpeopleworkasself-employedbut inmostcasestheyhavenotundergoneanyentrepre-neurialtraining.Thisiswhythemajorityofyouthworkinginthisareahavelowproductivity.

153.Theyouthcanbenefitfromspecificprogramsthatsupporttheirentrepreneurialactivitiesbutthesemustbewelltargeted.Supportforyoungentrepreneursincludesmeasuresthatprovidetheunemployedwithfinancialandtechnicalassistanceforentrepreneurship,includingmicrocredits,businessmanagementtraining,mentoringandinitiativestoincreasetheiropportunitiesforexpansion.Theseyoungpeoplemustreceivebusinessmanagementtrainingwhichwillallowthemtoacquirethenecessarycapacities.Box5providesasuccessfulexampleofsuchprogrammes.

154. Youthassistanceprogrammesmustbewelltargetedespeciallywherefundsareprovidedotherwisetheymayfailorevenbeharmfulandhaveverylittleimpact.

155. Inthisregard,the«SenegalPromiseProgramme»implementedinSenegal(AfDB,OECD,2012)recordedpositiveresults.Itisanintensivetraininginitiativeforyouthentrepreneurshipoveraperiodof14months.Itincludestheprovisionofincubatorswithofficespace,monthlytrainingworkshops,grouplearning,mentorshipandcounselling.The initiative is the linkbetweenyoungentrepreneursand theNationalYouthEmploymentFund(FNEJ),throughfinancingfacilities.In2008,17«promising»entrepre-neursgraduatedfromthefirstbatch;9youngparticipantsestablishedtheircompaniesand35companymanagerswererecruitedtomentoryoungentrepreneurs.The9youngentrepreneurscreatedatotalof137jobsintheirenterprises.

156.Topromoteindividualcompanies,otheractionsmaybetakentoi)ensureindividualcompanieshaveac-cesstoaworkspaceandinfrastructurebyimprovingurbanizationpolicies,ii)relyonnon-governmentalorganizationstocarryoutintegratedinterventionsthathelpthedisadvantagedyouthtogetintothesectorbyaddressingmultipleconstraints(e.g.Jointlydevelopasetofskillsordevelopskillswhileprovidingaccesstofinancing).

• Thesalariedemploymentsector

157. – Private sector development:theprivatesectorisassignedanimportantroleinjobcreationinWestAfrica.Yet,itisstillconfrontedwithsignificantconstraintsandlowproductivity.

158. Itisimportanttomakethissectordynamictoprovidespecificsolutionstotheobstaclesfacedbyeachgroup of companies.

159. AccordingtosurveysonbusinessesconductedbytheWorldBankinSub-SaharanAfrica,themainob-staclesarenotregulationsoreducationbutratherelectricityandfunding.Governmentsmustthereforeimplement measures to alleviate electricity supply problems and promote access to credit.

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160. -Integration of young graduates: Oneoftheobstaclesrelatedtotheintegrationofyoungpeopleisthelackofworkexperienceandthemismatchbetweentheskillstaughtatschoolandthoserequiredinthelabour market.

161.Intermsoffacilitatingtheintegrationofyoungpeople,thefollowingstepscanbetaken:

» Alleviatethetaxburdenofcompanieswithprovisionsthatpromotetheemploymentofyoungpeo-ple,

» Developprograms like the youth Employment andSkillsDevelopmentProject (PEJEDEC) inCôted’Ivoiretogiveyoungpeopletheirfirstexperienceincompanies,

» Ensureabettermatchbetweeneducation/trainingandlabourmarketneeds.

Regional level

• Accelerating regional integration

162. Promotion of regional integration isanimportantfactorwhichallowsregionalcompaniesnotonlytoincreasereturnstoscalebutalsotobetteradjusttoexternalshocksinordertoovercomethem.Regionalintegrationenablescompanies toexpandtheiractivities to thesub-regionandfacilitate inter-regionaltradewhichhasapositiveeffectonyouthemployment.

» Ensure a healthy macroeconomic framework: meeting theconvergencecriteriaprovidesa frame-worktoimprovethemacroeconomicenvironment.Asoundmacroeconomicenvironmentpromotesincreasedinvestmentsandthereforeemployment;

» Give priority to infrastructure:facilitatetheinterconnectionbetweenthecountrieswhileeliminat-ingnon-tariffbarriersandacceleratingtheestablishmentoftheECOWAScommonmarkettobetterprepareforthecontinentalfreetradearea;

» Foster Regional Financial Integration (RFI):thefinancialsystemsinthesub-regionarenotsufficientlydevelopedandtheyofferonlyalimitedrangeofproductsatrelativelyhighcosts.

• Ensure the maintenance of peace

163.Peacekeepingisoneof themajorchallenges facingECOWAScountries.Thepromotionofyouthem-ploymentinvolvesthestimulationofthebusinessclimatewhichcannotbedonewithoutafairlystablepoliticalandsecurityenvironment.TheWestAfricaregionhasbeenhitbyrecurrentpoliticalinstabilityandinsecurity.Since2011,securitytensionshaveincreasedsharplyintheSahel-SaharanregionwithpersistentcrisesandterroristactivitiesinnorthernMali,NigeriaandmorerecentlyintheborderareasbetweenNigeriaandNiger.Armedconflictscreateanatmosphereofterrorandfearwhicharenotcon-ducivetoeconomicactivitiessincetheyconstituteamoreimportantriskfactorthantherisksinherentin theactivity.Armedconflicts result in thedestructionofbasic infrastructure,diversionof funds forthepurchaseofweapons,recruitmentofyoungidlersinmilitiasandadeclineinhumandevelopmentindicators.ECOWASmustthereforeplayaveryimportantroleinpeacekeeping,especiallyinacontextwhichwillbemarkedbyelections,whichoftengenerateinstability,inmanycountriesintheregionovertheperiod2014-2016(Nigeria,Togo,BurkinaFaso,CôteD’Ivoire,NigerandBenin).

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IV. Conclusion and Recommendations

164.WestAfricawasmarked,amongotherthings,bytwomajoreventsin2014whichplacetheregionunderthespotlightofinternationalmedia.ThesearetheoutbreakofEbolaandtheresurgenceofsecurityten-sionsinSahelregion.

165.TheEbolaoutbreakinducedadeclineinactivityinthethreemostaffectedcountries,Guinea,LiberiaandSierraLeone.Theturnaroundoftheestablishedtrendforcountriesthathadreturnedtovigorousactivityledtoasluggishgrowthof0.3%inLiberiaand1.3%inGuineain2014,withtheexceptionofSierraLeonewhichwasabletolimitthedecelerationofitseconomyto6.6%.

166.Thesecondmajoreventwastheintensificationofterroristactivitiesinnorth-easternNigeriawithreper-cussionsonneighbouringcountries likeNigerandthepersistentpolitical instabilityandinsecurity innorthernMali.

167.Despitetheseuncertainties,theregionwasabletomaintainitsfavourablepatternofeconomicgrowth.Theexpansioninactivitywouldsettleat6.3%in2014,withaprospectofacceleratingto6.9%in2015.This expansionmainly stems from thedynamismofpublic investments and increasedactivity in thetelecommunications,tradingandagriculturesectors,inacontextofthedevelopmentofoilandminingactivities.

168.Thesetrends,tosomeextent,reflecttheresiliencetoshocksattheregionallevel,withthegradualbuild-ingoffoundationsforlongtermgrowth,whichhowever,isstilltakingtimetobeinclusive.Ontheotherhand,theypointoutahighvulnerabilityofeconomicperformanceforindividualcountriesandthereforetheneedtodevelopnationalandinternationalresponsecapacitiestomultifacetedcrises.Inthisregard,thevariousepisodesoftheEbolacrisis,inparticular,limitedandpoorly-coordinatedresponsesatthebeginningoftheoutbreakandtheextensivenationalandinternationaleffortsdeployedthereaftershouldbecapitalizedforresiliencecapacitybuildingforcountriesintheregion.

169.Thespreadoftheeffectsofeconomicgrowthcontinuetolagbehindexpectationsintermsofimprov-ingthesocialsituation.Ananalysisofthesocialsituationrevealedthattheregionisstillmarkedbylowhumandevelopmentandpersistenthighunemployment,particularlyamongtheyouth.Inthisregard,thegoalofreducingextremepovertybyhalfby2015wouldbeoutofreachformorethanhalfofthecountriesintheregion.Therelativelyhighexclusionoftheyouthfromlabourmarketisasourceofmajorconcern.Indeed,apartfromtheconsequencesoflackofincome,unemployedorunderemployedyouthinprecarioussituationsaremorepronetomarginalizationandviolenceandthiscouldeasilypushthemtojoincriminalorterroristgroups.

170. Regardingregionalintegration,thecreationofasinglecurrencyin2020hasbeenbackedbyastrongpoliticalsupportthroughthenominationoftheHeadsofStateofGhanaandNigerasleaderstoacceler-atetheprocess.ProgresswasalsonotedintheareaoffreemovementwiththeadoptionofthebiometricidentitycardbyECOWASin2014.Inaddition,inthemovetowardsacommonmarket,theregiontookanimportantstepwiththeentryintoforceoftheECOWAScommonexternaltariffinJanuary2015.

171. Onthedeepeningofregionaleconomicdevelopment,ECOWASadoptedtheCommunityDevelopmentProgrammeinJuly2014todefinethedevelopmentprioritiesoftheregion.Onitspart,UEMOAengagedintheimplementationofitsregionaleconomicprogrammewiththemobilizationofsignificantfundinginSeptember2014inDubaitoacceleratetheimplementationofcommunityinvestmentprojectsandprogrammes.Finally,itshouldbenotedthatthetwoCommissionsfinalizedtechnicaldiscussionswiththeEuropeanUnionwiththeviewtosigningtheEconomicPartnershipAgreement.

35

172. Despite thesignificantprogressmade,challengesremain.Difficultiesexist in the interconnectionbe-tweencountries,thuslimitingtheeffectsofcreatingtradeandintra-communityinvestmentopportunities.Also,theurgencytocontinueandexpandinvestmentsinphysicalandsocialinfrastructureandbuildingproductioncapacityremains.Intermsofmonetaryintegration,recurringchangesinagendaandroad-mapraisesdoubtsabouttheimplementationofthesinglecurrency.

173.Againstthisbackground,thefollowingrecommendationsareformulatedforstates:

» Continueandexpandpublicinvestmentexpenditurestoreducethecostsoffactorsofproduction,facilitateregionalinterconnectionandsupporteconomicgrowth;

» Continueincreasedprivatesectorpartnershipinitiativesanduseoffinancialmarketsforfundingin-vestmentstoensurefiscalsustainability;

» Considerthedevelopmentagendaandregionalintegrationinthedevelopmentandimplementationofeconomicstrategiesandpolicies;

» Developandconsolidatestrategiestoaddressyouthemploymentchallengesinparticular:(a) Fortheintegrationofyoungpeopleintheagriculturalsector:removingconstraintstoagricul-

turalproductivity,particularlyintermsofaccesstofinancing,adequatelandpolicy,weakskillsandinadequatesupportinfrastructure;

(b) For individualentrepreneurs : the implementationofmeasurescombiningfinancing facilitiesandtechnicalaswellasmanagementcapacity-building;

(c) Foryounggraduates : theimplementationof tax incentivemeasuresandprogrammesfor theemployabilityofyounggraduatesbycompaniesandtheacquisitionoffirstworkexperience;

(d) Labourmarkettransparency:establishmentofplatformsforinformationonjobopportunitiesandincentives for companies to implement good recruitment practices.

174. Concerningthesub-regionalCommissions,tworecommendationswereproposed:

» Acceleratetheimplementationofprioritydevelopmentprogrammes,namely,theCommunityDevel-opmentProgramme(CDP)andRegionalEconomicProgramme(REP)PERofECOWASandUEMOArespectivelywhileattachingurgencytoinvestmentsthatwillfacilitateregionalinterconnection;

» Developandconsolidatetheregionalcapacitytorespondtohealthcrisesandtheirconsequences; » ImplementtheECOWASSahelstrategyandstrengthencrisismanagementmechanismsinorderto

containthesecurityandterrorismrisks.

36

V. References

1. AGEPE(2014),«EmploymentSituationinCôted’Ivoirein2012».

2. WAMA(2014).WestAfricanMonetaryAgency(WAMA):ECOWASmonetarycooperationprogram2013Report,Freetown(SierraLeone),June2014.

3. ADBandOECD(2012),«AfricanEconomicOutlook2012:PromotingYouthEmployment»,OECDDe-velopmentCentreandAfricanDevelopmentBank,OECD,Paris.

4. AfDB,OECD,UNDP:AfricanEconomicoutlook,2014.

5. WorldBank(2009),«AfricanDevelopmentIndicators2008/09,TheLittleDataBookonAfrica2008/09,andAfricanDevelopmentIndicators2008/09CD-ROMmulti-users,»,Washington,DC20433,UnitedStates of America.

6. World Bank (2013), « World Development Report 2013: Jobs», Washington, DC: World Bank.DOI:10.1596/978-0-8213-9575-2.License:CreativeCommonsAttributionCCBY3.0.

7. ECA(2015).Socio-economicimpactofEbolaonAfrica,RevisedEdition,January2015.

8. ECA(2014).MDGReport2014:AssessingprogressinAfricatowardtheMillenniumDevelopmentGoals2014 Edition.

9. ECA/SRO6AO(2014),EconomicReportonAfrica:DynamicIndustrialPolicyinAfrica,2014Edition.

10. ECA/SRO-WA (2013),WestAfricaRegional IntegrationReport« Inclusivegreengrowth toacceleratesocio-economicdevelopmentinWestAfrica»,2013Edition.

11. ECA/SRO-WA (2013).WestAfricaRegional IntegrationReport« Inclusivegreengrowth toacceleratesocio-economicdevelopmentinWestAfrica»-2013Edition.

12. ECA/SRO-WA (2013).WestAfricaRegional IntegrationReport« Inclusivegreengrowth toacceleratesocio-economicdevelopmentinWestAfrica»-2013Edition.

13. DeonFilmerandLouiseFox.2014.«YouthemploymentinSub-SaharanAfrica».AfricanDevelopmentForumSeries.Washington,DC:WorldBank.License:CreativeCommonsAttributionCCBY3.0.

14. EPA,AfricanEconomicOutlook2014:WestAfrica.

15. IMF:RegionalEconomicOutlook:Sub-SaharanAfrica,October2014.

16. GlobalMigrationGroup(GMG),Mainstreamingmigrationintodevelopmentplanning,Ahandbookforpolicy-makersandpractitioners,©2010InternationalOrganizationforMigration(IOM).

17. LachaudJeanPierre(1995),«labourmarketsocialexclusioninFrench-speakingAfricancapitals:someelementsofanalysis».In:Third-World.1995,Volume36N°142.pp.279-302.

18. NationalBureauofStatistic(NBS)ofNigeria(2014),Nigeriain2014:Economicreviewand2015-2017outlook.

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19. OIT(2010),««Globalemploymenttrendsfortheyouth:August2010:specialissueontheimpactoftheglobaleconomiccrisisontheyouth»,InternationalLabourOffice.-Geneva:ILO.

20. InternationalOrganizationforMigration(IOM),stateofmigrationintheworldin2010.

21. InternationalOrganizationforMigration(IOM),stateofmigrationintheworldin2011.

22. InternationalOrganizationforMigration(IOM),stateofmigrationintheworldin2013.

23. UNDP(2015),HumanDevelopmentReport2015.

24. Reporton«SocialexclusioninGuinea»in2002bytheNationalStatisticsDirectorate(NSD)ofGuineainpartnershipwithUNDP.

25. Reporton«PovertyMonitoringSurveyinSenegal(ESPS-II)»publishedin2013undertheleadershipoftheNationalAgencyofStatisticsandDemography(ANSD)andtheMinistryofEconomyandFinance(MEF).

26. UEMOA(2013).:INTERIMREPORTONTHEIMPLEMENTATIONOFMULTILATERALSURVEILLANCE,June2013.

27. UEMOA(2014):INTERIMREPORTONTHEIMPLEMENTATIONOFMULTILATERALSURVEILLANCE,June2014.

28. UN/DESA(2015),WorldEconomicSituationandProspects(WESP)2015,January2015.

Webography

1. IbrahimIndexofAfricanGovernance(IIAG)2014,http://www.moibrahimfoundation.org/

2. WorldBankGroup,DoingBusiness2015,http://www.doingbusiness.org/

3. TransparencyInternational(2014),CorruptionPerceptionsIndex(CPI)2014,https://www.transparency.org/cpi2014

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Appendix:

A. Economic situation on country basis in 2014

Benin

1. In2014,Beninrecordedagrowthrateestimatedat5.3%.Thisperformanceisattributabletothegoodperformanceinallsectorsoftheeconomywithagrowthof6.6%intheprimarysector,4.6%inthesec-ondarysectorand4.4%inthetertiarysector.Asregardsjobs,economicgrowthwouldbemainlydrivenbyfinalconsumptionwhichwouldjumpby6.9%in2014against4.7%in2013,primarilyduetopublicconsumptionwhichwouldgoupfrom4.2%in2013to8.0%in2014.

2. Economicactivityin2014occurredwithinacontextofcontainedinflation.Theaverageannualinflationwouldsettleat-1.1%.

3. In2014,thepublicfinancesituationwasmarkedbythesimultaneousdeclineingovernmentrevenuesandexpenditures.Totalrevenuesamountedto780.8billionin2014against795.4billionthepreviousyear, representingadecreaseof1.8%.Thedecline in revenue isdue to the fall incustoms revenues(-2.6%)andnon-tax revenues (-37.5%).However, tax revenueswentupby14.4% to settleat339.1billion.Totalexpendituredroppedby3.7%in2014,from952billionto916.5billion.Thedecreaseislinkedtolowercurrenttransfers(-3.1%)andinterestpaidondomesticdebt(-20.2%).Oncashbasis,theoverallbalancerecordedadeficitofCFAF166.2billionorworsenedby12.8%.Thisdeficitwasfinancedwithdomesticresourcesthrough«otherbankfinancing»andexternalresourcesthroughgrants/projectsand program me loans.

4. Foreigntradein2014continuedtobecharacterizedbytheworseningofthetradedeficit.Thebalanceofpaymentswasmarkedbydeteriorationinthecurrentaccountdeficitwhichmeasuredintermsofnomi-nalGDPwouldsettleat8.2%in2014against7.9%in2013,duetothewideningofthetradedeficitandtheprimaryincomebalancecoupledwiththedeclineinthesecondaryincomesurplus.Theoverallbalanceisexpectedtosettleat1.5%ofGDPin2014against2.8%in2013.

Burkina Faso

5. In2014,economicgrowthinBurkinaFasostoodat4.5%.Thisperformanceisasaresultofthedynamisminthesecondarysector(5.4%growth)andthetertiarysector(5.9%expansion).Theprimarysectorwhichgrewbyonly2.7%wasseverelyaffectedbythelateonsetoftherainswhichcausedareductionintheproductionofgrainsinfavourofotherlesswater-intensivecrops.

6. ThelevelofpricesinBurkinaFasodroppedin2014from0.5%in2013to-0.3%.Thisdeclineismainlyattributed to a downward trend in prices of local products.

7. Publicfinancewascharacterizedbyanimprovementintheoveralldeficit,representing1.9%ofGDPin2014against3.3%in2013.Thisisasaresultofthedisproportionateincreaseinrevenuecomparedtothatoftotalexpenditureandnetlending.(UEMOAReport,December2014).

8. Intermsofforeigntradein2014,exportsroseby25.3%involumeand5.6%invalue.However,importsdeclinedby5.3%involumeand19.2%invalue.

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Cape Verde

9. Despiteitspastsuccess,CapeVerdeisstrugglingtocontinueonasustainableandinclusivegrowthpath.Withoutrenewablenaturalresourcesandduetoconditionsthatarenotconduciveforagriculture,thecountryisveryvulnerabletoexogenousshocks.Thetourismsector,whichisthemainengineofgrowth,wasabletomakejudicioususeofitspotentialssuchasbiodiversity,landscapesandtheenvironment.Thehotelsandrestaurantssector,forexample,recordedanexpansionwhichwasalmostsixtimesfasterthanthatofthenationaleconomybetween2000and2010andtotallednearly16%ofGDPin2010.

10. Aftersettlingat0.5%in2013,therealGDPgrowthofCapeVerdestoodat1%in2014.TheeconomyofCapeVerdewhichisdependentontourismwouldbepartlyaffectedbytheoutbreakofEbolainthesub-regionwhichisdissuadingmanytourists.

11. Inflationstoodat-0.24%in2014,thusregisteringadeclineof1.74percentagepointscomparedtoitslevelof1.5%in2013.

12. Withregardstopublicfinances,totalstaterevenueexpandedby2.7%from37.420billion(24.22%ofGDP)to38.447billion(24.40%ofGDP)inlocalcurrency.GovernmentexpenditureroseinvaluebutdeclinedasapercentageofGDP.Intermsofvalue,governmentexpenditureclimbedfrom51.332billioninlocalcurrencyto51.573billionrepresentinganincreaseof0.5%asapercentageofGDP.In2014,itwas32.7%against33.2%in2013.CapeVerde’sbudgetdeficitasapercentageofGDPdeterioratedfurtherfrom11.5%in2013to12.7%in2014.

13. Importsofgoodsandservicesexpandedby8.7%in2014againstadeclineof5.1%in2013.Exportsshrankby0.025%.ThecurrentaccountbalancefurtherworsenedfromUS$-74millionin2013toUS$-173millionin2014.Thecurrentaccountdeficitwas3.6%ofGDPin2013and9.1%ofGDPin2014.

Côte d’Ivoire

14. Côted’Ivoiresustaineditsgrowthmomentum.Indeed,thegrowthratestoodat9%in2014against9.2%in2013.Thisgrowthwasdrivenbythedynamisminallthesectorsofactivity.

15. Theannualaverage inflation in2014wascontainedbelow thecommunity thresholdof3%. Indeed,inflationstoodat0.5%andthisisexplainedbyadropinfoodandnon-alcoholicbeveragespricesby-2.1%.However,pricesofnon-foodproductswentupby1.4%.Year-on-yearinflationinDecember2014inchedupby0.9%.

16. Intermsofpublicfinancesin2014,totalrevenueandgrantsgrewbyCFAF255.7billionor8.4%.TotalexpenditureandnetlendingexpandedbyCFAF279.6billionwhichishigherthantheincreaseinrev-enueandgrants.Thisledtothedeteriorationoftheoverallfiscalbalancewhichsettledat-2.2%ofGDP.

17. Foreigntradewasmarkedbyasimultaneousincreaseinimportsandexportsinbothvalueandvolume.Therewasamoresignificantincreaseinexportscomparedtoimports.Infact,thevolumeofexportsgrewby4.3%against3.8%forimportswhilethevalueofexportswentupby9.8%against5.6%forimports.Thisresultedinanincreaseintradesurplusby42.25%andimprovedthecoveragerateandtermsoftrade.

18. Regardingthemonetarysituation,therewasa15.9%expansioninmoneysupply,animprovementinnetforeignassetsby13.7%andanincreaseindomesticcreditby19.3%.

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Gambia

19. EconomicgrowthinGambiafelldrasticallyin2014followinganinitialdeceleration. Indeed,growthwhichwasfirstprojectedatover5%settledat-0.22%in2014against4.78%in2013accordingtotheWorldEconomicOutlookpublishedbytheInternationalMonetaryFund.TheGambianeconomywhichisheavilydependentonagricultureand tourismand started recovering slowly from the2011 severedroughthadtoexperienceonceagainadverseweatherconditionsin2014.Therainyseasonwhichwasadisastercausedthelossofnearly15%ofagriculturalproduction.TheoutbreakoftheEbolavirusdiseaseinWestAfricainthesecondhalfof2014putaheavystrainontheresourcesthatsupporttourismactivi-tiesinthesub-region.AlthoughGambiawasnotaffectedbytheEbolavirusdisease,itsawadeclineititstourismrevenuebyhalfoverthe2014/2015season.Thiswholesituationputpressureonthevalueofthelocalcurrency(Dalasi)withabout7.8%depreciationagainsttheUSDoverthesecondhalfof2014.

20. Inflationstoodat6.27%in2014against5.22%in2013.Thelevelin2014was1percentagepointhigherthanthatof2013whosevaluewas5.22%.Theincreaseinthepricelevelispartlyexplainedbythepres-surecreatedbythedeclineinagriculturalproduction.

21. Withregardtopublicfinances,therewasanincreaseintotalrevenuefrom5.99billionDalasiin2013to7.72billionin2014representinganincreaseof28.88%.Therevenueaccountedfor22.45%ofGDPin2014.Totalexpenditurealsowentupin2014from8.75billionin2013to10.79billion,representinganincreaseof23.31%.Expenditureamountedto10.797billionDalasi(31.4%ofGDP)in2014against8.753billion(27.1%ofGDP)in2013.Theincreaseingovernmentexpenditureisduetotheeffectofexternalshocksandpersistentfinancialdifficultiesinpublicutilitycompanies.Infact,emergencyspend-ingworththeequivalentof5.25%ofGDPwasmadebythenationalwaterandElectricityCompany,telecommunicationsandpeanutcompanies.Governmentdebtin2014stoodatnearly12.25%ofGDPandthisincreaseisexplainedbygovernmentrevenuelossesduetoexternalshocks(0.75%ofGDP),non-receiptofbudgetsupportfromtheWorldBankandtheAfricanDevelopmentBank(1%ofGDP)andmanyotherfactors.ThebudgetaryimpactoftheEbolavirusdiseasewasestimatedatUS$7million.

22. Intermsofforeigntradein2014,exportsofgoodsandservicesdippedby13.53%whiletheimportofgoodsandservicesroseby6.07%.TherewasadeteriorationofthecurrentaccountdeficitfromUS$96milliontoUS$105billion.AsapercentageofGDP,thecurrentaccountbalancerosefrom-10.7%in2013to-12.7%in2014oranincreaseof2percentagepoints.TheGambianauthoritiesestimatedtheimpactoftherainyseasonandtheEbolaoutbreakataboutUS$12millionontheirbalanceofpayments.

23. Atthemonetarylevel,Gambiacontinueditsflexibleexchangeratepolicyandmaintainedatightmon-etarypolicytosupportthemacroeconomicpolicyandexchangeratestability.

Ghana

24. Thegrowthratestood4.2%in2014against7.3%in2013.Thisgrowthwasdrivenmainlybythenon-oilsector.

25. Theinflationrateinthecountrywas15.5%attheendofJune2014wellabovethetargetoftheCentralBankofGhanawhichwantedtoachievelessthanadouble-digitinflationrate(8%+/-2%).Inflationwasdrivenbytheimpactofthedelayineffectingpricehikesandthe31%depreciationofthenationalcur-rency(Cedi)againsttheUSDollar.

26. In2014,thebudgetdeficitinGhanaremainedveryhighdespitetheactionstakeninmid-2013forthegradualconsolidationofthetaxbase.Thebudgetdeficitoncashbasisstoodat9.5%ofGDPagainstaninitialforecastof8.5%ofGDP.Despitehighoilrevenues,improvedtaxcollectionandpayrollcontrols,thedelayintheimplementationofcertainmeasuresassociatedwiththepaymentofunbudgetedsalaryallowancesledtothefurtherdeteriorationinthebudgetdeficit.Budgetdeficitoncommitmentbasiswascloseto10%ofGDP.

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27. The external situationwasmarkedby adecline in exports fromUS$13752million in2013 toUS$12983millionin2014indicatinga5.6%fall.Importsalsowentdownfrom€17600millionin2013to€14573millionin2014,orrecordedadropof17.2%.ThisaccelerateddeclineinimportscomparedtoexportshelpedtoimprovethetradedeficitwhichfellfromUS$3848milliontoUS$1590millionorfrom7.9%ofGDPto4.1%ofGDP.Thebalanceofservicesalsoimprovedfrom-2444millionin2013to2136millionin2014.Thebalanceoftransfersandincomedeterioratedcomparedto2014butthecur-rentaccountbalanceimprovedinrelationtoitsvaluein2013.ThecapitalandfinancialaccountwentdownfromabalanceofUS$5368million(11%ofGDP)in2013toUS$3350million(8.7%ofGDP)in2014.Overall,thebalanceofpaymentdeficitstoodatUS$37million(0.1%ofGDP),animprovementcomparedtoitsvalueofUS$436million(0.9%ofGDP)in2013.

Guinea

28. In2014,GuineareviseditsGDPgrowthratefrom4.5%to3.5%,andthento1.3%,duetotheEbolaoutbreak,whichledtoacontractioninthelevelofeconomicactivities.Year-on-yearinflationlevelandannualaveragereached9.0%and9.7%respectivelyagainst10.5%and11.9%in2013.Thisdecelera-tioninconsumerpricesislinked,amongothers,totheeffortsatsustainingprogrammesthatsupportfoodsecurity,coupledwiththedeclineindemandduetotheEbolahemorrhagicfever.

29. In2014,thecumulativetradedeficitwas12.2%ofGDPfromalevelof22.6%in2013,representingadropof10.4pointsthankstoa22.6%riseinexportearnings,year-on-year,againstadecreaseinimportsby11.7%.Overtheperiod,thedegreeofopennessofGuineadeclinedby1.1pointstosettleat31.6%ofGDPin2014against32.7%in2013,dueamongotherstotheimpactofthepsychosisoftheEbolahemorrhagicfever.

30. In2014,thecumulativetotalrevenueandexpenditurereached21.0%and25.3%ofGDPrespectivelyagainst21.6%and24.5%in2013,indicatingadeclineinrevenuesby0.6pointagainstanincreaseinexpendituresby0.8point.ThissituationispartlyduetotheimpactofthepsychosisoftheEbolahemor-rhagicfeveroutbreak.In2014,theoverallbudgetdeficitandexcludinggrantsstoodat4.3%and6.8%ofGDPrespectivelyagainst2.1%and6.9%in2013.Thisrepresentsanupwardtrendintheoveralldeficitagainstarelativestabilityofthebudgetdeficitexcludinggrants.

31. InDecember2014,moneysupplyreached31.8%ofGDPagainst29.2%in2013,indicatinganupwardtrendduenotably to thesignificantexpansioningovernmentspending.Theincrease innetdomesticassetsby19.2%ofGDPfromDecember2013to24.3%in2014ispartlyduetohigherdomesticallyfinancedinvestmentexpenditure.Theincreaseinnetdomesticassetsby19.2%ofGDPfromDecem-ber2013to24.3%in2014ispartlyduetotheupturnininvestmentexpenditurefundedwithdomesticresources.Ontheotherhand,thedeclineinnetforeignassetsby10.0%ofGDPin2013to7.4%inDecember2014stemmed,amongothers,fromasignificantshortfallingrantsandloansprojections.

32. Overtheperiod,creditstogovernmentandtheeconomysettledat15.8%and12.9%ofGDPrespec-tivelyin2014against14.1%and9.3%in2013,indicatinganincreaseduetotheexpansionofgovern-mentexpenditurewithaslightupsurgeinprivateinvestments.

Guinea Bissau

33. Economicgrowthin2014stoodat2.9%in2014against0.9%in2013.Thisrenewedgrowthcouldbeexplainedbytherecoveryinallsectors.Theprimarysectorachieved2.3%growthin2014,thesecond-arysectorrecorded2.9%expansionin2014against1.9%in2013andthetertiarysectorgrewby3.5%in2014afteranegativerateof-1.1%in2013.

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34. JustlikemanyUEMOAcountries,theinflationratedroppedfrom0.7%in2013to-1%in2014.Thissituationoffallingpricesisattributabletothe,«Foodandnon-alcoholicbeverages»,«Communication»aswellas«clothingandfootwear»functions.

35. Asregardspublicfinances,2014wasmarkedbyaworseningofthegovernmentdeficitexcludinggrantswhichwidenedfrom7.2%in2013to10.5%in2014.Thissituationisattributedtothesubstantialgrowthin government expenditures compared to government revenue. Total outstanding public debt stood at 64.8%ofGDPagainst57.6%in2013.Thisrelativelyhighrateislinkedtothedomesticdebtwhichac-countedformorethanhalfoftheoutstandingtotalpublicdebt.(UEMOA)

36. Foreigntradewasmarkedbyanincreaseinbothexports(4.1%)andimports(13.8%).Thisfastergrowthofimportscomparedtoexportsfurtheraggravatedthealreadydeterioratingtradebalanceandtherebyloweringthecoveragerate.

Liberia

37. InLiberia2014wasmarkedbydeterioratingeconomicconditions.ThiseconomicdownturnwasduetothecombinedeffectoftheEbolavirusdiseaseandstructuralproblems.RealGDPgrowthwhichwaspreviouslyprojectedat5.9%for2014wasreviewedto0.3%,from8.7%attheendof2013.ThissharpcontractionisonaccountoftheoutbreakoftheEbolaepidemic.Withtheexceptionofagriculturewhichisexpectedtoincreaseslightly,alltheothersectorsareexpectedtoregisteradecline:logging(0%in2014against0.5%in2013);miningandpanning(-5.9%in2014against49.6%in2013);manufacturingsector(4.2%in2014against9.2%in2013)andservices(2.9%against7.2%attheendof2013).

38. In2014,inflationincreasedmainlyduetoasharpriseinfoodprices.Inflationattheendof2014wasestimatedat14.7%bytheInternationalMonetaryFund.

39. PublicfinanceinLiberiawasseverelyaffectedbytheEbolavirusdisease.Thebudgetfortheperiod1July2014to30June2015withavalueofUS$635.2millionwasincreasedby9%comparedtothatoftheperiodJuly2013toJune2014.TheconfigurationofthelastbudgetdiffersfromthatofthepreviousyearduetotheimpactoftheEbolacrisisonbudgetrevenuesandmacroeconomicindicators.Withtheexceptionofexpenditureinthefieldofhealthandsecurity,allotherexpenseswerereducedcomparedtotheamountsintheprovisionalbudgetproposal.Taxrevenuesareexpectedtocontribute53.4%tothefinancingofthisnewbudget,non-taxrevenue9.8%,subsidies9.3%andloansfrominstitutionsatabout17%.UndertheJune2013/July2014budget,Liberiawasabletocollect91%ofitstaxrevenueprojec-tionsand85%non-taxrevenueprojections.

Mali

40. TheeconomicgrowthrateinMalistoodat5.8%in2014against1.7%in2013.Thisperformancewasdrivenbythebuoyancyinallsectorswithanexpansionof9.4%fortheprimarysectoragainst-7.4%in2013.Inthesecondarysector,therewas1.8%growthin2014against5.5%in2013.Thetertiarysectorrecordedanexpansionof8.9%afterdecliningby8.7%in2013.

41. Inflationstoodat0.9%in2014,thusbelowthethresholdundertheUEMOAconvergencecriteria.Thiscontainmentofpricesislinkedtothe2013-2014farmingseason.

42. Thepublicfinancesituationin2014wascharacterizedbyasimultaneousgrowthintotalrevenueandexpenditure.Intermsoftotalrevenue,therewasanincreaseof11.45%mainlyasaresultofanexpan-sionof14.92%in tax revenues.However, tax revenueswerestill insufficientbecause the15.8%taxpressureratewaslowerthanthenewcriterionof20%setbyUEMOA.Publiccurrentexpendituresgrewby9.28%.TheoverallbudgetbalanceincludinggrantsasapercentageofGDPwas-4.7%in2014,in-

43

dicatingadeteriorationcomparedtotheratioin2013whichwas-2.8%.Thebudgetbalanceexcludinggrantsstoodat-10.1%ofGDPin2014against-6.5%in2013.

43. Theyear2014wasmarkedbyasharpdeteriorationinthetradebalance.Importsgrewby6.55%whileexportsdwindledby7.55%.Theriseinimportscouldbeattributedtotheincreaseintheimportsofpe-troleumandfoodproducts.TheoverallpositionofthebalanceofpaymentsrecordedasurplusofCFAF5.2billionin2014againstadeficitof86billionin2013.

Niger

44. RealGDPgrowthofthecountrystoodat7.1%in2014against4.1%in2013.Thispositivetrendisat-tributabletothegoodperformanceinallsectorsoftheeconomy.Theprimarysectorrecordedgrewby8.2%in2014against0%in2013.Growthinthesecondarysectorstoodat3.7%against7.3%in2013.Thetertiarysectorregisteredanexpansionof5.1%in2014against6.7%in2013.Onthedemandside,growthwasdrivenmainlyby investments (15.9%expansionagainst2.6%in2013),consumption in-creasedby3.4%andexportsby4.2%.

45. Theconsumerpricelevelstoodat2.5%in2014against2.3%in2013.NigerthereforemettheUEMOAcommunitystandardsetatlessthan3%.Thedeclineinthegeneralpricelevelscouldbeattributedtothesuccessofthe2014-2015cropyearasproductionisexpectedtobe7%higherthanthepreviouscropyear.

46. Withregardstopublicfinances,therewasasimultaneousincreaseinbudgetrevenuesandtotalexpen-ditures.Totalrevenuesrecordedagrowthof20.21%in2014thankspartlytotheincreaseintaxrevenuesby15.43%.However,thetaxpressurerateof16.7%remainsbelowthe20%ratesetbyUEMOA.Grantsincreasedby7.51%.Intermsoftotalexpenditure,therewasanincreaseof72.8%duemainlytothe126.95%growthincapitalexpendituresandanexpansionof18.04%incurrentexpenditures.Theover-allbudgetbalanceincludinggrantssettledat-2.9%ofGDPagainst-0.5%in2013.

47. Withregardstotheexternalsector,thetradedeficitwasCFAF287.1billionagainstCFAF228.0billionin2013.Thecurrentaccountdeficitstoodat730.3billionagainst590.6billionin2013.Intotal,thebal-anceofpaymentssurpluswas147.1billionin2014against102.4billionin2013.

Nigeria

48. In2014,economicgrowthinNigeriastoodat6.22%against5.49%.Thisexpansionwassustainedbythenon-oilsectorswhicharetheagriculturalsector(withagrowthrateof4.27%against2.94%in2013),theindustrialsector(6.76%against2.16%in2013)andtheservicessector(6.85%against8.38%in2013).In2014,theprimarysectorcontributed22.90%toGDPagainst23.33%in2013,thesecondarysectorcontributed24.93%toGDPagainst24.81%in2013andthetertiarysectorcontributed52.16%toGDPagainst51.86%in2014.

49. The levelof inflation in2014was8.05%against8.50%in2013.Thisdecline in inflation isattribut-abletothesimultaneousfallinthegeneralpricelevel.However,thisdownwardtrendwasmuchmorepronouncedinthelevelofpricesofgoodsexcludingagriculturalproducts(6.9%in2014against7.7%in2013oradeclineof80basispoint)thanthelevelofpricesofagriculturalproductsandby-products(9.5%in2014against9.7%in2013oradropof20basispoints).

50. Foreigntradein2014wasmarkedbyagrowthinbothimportsandexports.Therewasalsoanimprove-mentinthetradesurplusinthatitgrewby37.9%comparedtoitslevelin2013.Thisimprovementinthetradebalanceisonaccountoftheincreaseinexportsby20.87%againstanexpansionofonly3.1%of imports.

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Senegal

51. RealGDPgrowthratewasestimatedat4.5%in2014.Thisgrowthwasdrivenbytheupturninthesec-ondarysector(4.9%expansionagainst-1.5%in2013)andthestrengthoftheservicessector(5%growthagainst6.4%in2013).

52. Theinflationratefellfrom0.7%in2013to-1.1%in2014.Infact,priceshavebenefitedfromafavour-ablecontextmarkedbythedropincrudeoilprices.

53. Therewasanimprovementinthetaxpressurewhichwasestimatedat18.9%in2014against18.4%in2013.However,thistaxpressurewasbelowthe20%standardsetbyUEMOA.Theimprovementinthetaxpressureisattributedtothecontinuedmodernizationof thetaxadministration,greaterownershipofthenewGeneralTaxCodeinthesecondyearofimplementationandfurtherstreamliningofpublicspendingpolicy.Comparedto2011,therewasareductioninoverallbudgetdeficitfrom-6.7%ofGDPin2011to-5.1%ofGDPin2014.TotalpublicdebtofSenegalstoodatCFAF3836.7billionin2014or49.3%ofGDP,including74%foreigndebtand26%domesticdebt.AlthoughtheratioofdebttoGDPwashigh,itwaslowerthanthecommunitystandardof70%setbyUEMOA.

54. Withregardstotheexternalsector,therewasanimprovementincurrentaccountdeficitwhichreached9.6%ofGDPin2014against10.8%in2013.Theimprovementinthecurrentaccountwasasaresultoftheimprovedtradedeficit(19.2%ofGDPin2014against20.3%in2013)andthestrengtheningofprivatecurrenttransfers.Withthegoodperformanceofthecapitalandfinancialtransactionsaccount,thesurplusofthebalanceofpaymentsisprojectedat92billionagainst21.1billiondeficitin2013.

Sierra Leone

55. SierraLeonewasontracktoachievethetargetof11%growthin2014,giventheachievementsmadein2013andthefirsthalfof2014.Performancein2013andthefirsthalfof2014wasdrivenbytheminingsectorandagriculturewhichhelpedtooffsettheeffectoftheoutbreakoftheEbolavirusdisease.The2014growthratewasestimatedatabout6.6%thanksmainlytotheunexpectedriseinironoreproduc-tion.Thisupsurgeinproductionhelpedtooffsetthedeclineinironoreprices.

56. Inflationwasbelow10%forthefirsttimeattheendof2013inthecountryduringthedecade.Itfollowedthistrendtill theoutbreakoftheEbolavirusdiseaseinthecountryinmid-2014.Inflationwhichhaddroppedfrom8.5%attheendof2013to7.8%attheendofJune2014shotupto9.3%attheendofNo-vember2014andreacheddoubledigitsattheendofDecember2014.Thisrisinginflationisexplainedbythedistortionsinsupplyandthedecreaseintheamountoffoodduetotheborderclosure.Therewasalsoaheavyblowintheagriculturalsectorandadepreciationofthenationalcurrency.

57. Theexecutionofthe2014budgetwasmarkedbydecliningrevenuesduetotheslowdownintheecono-myandincreasedspendingbecauseofthesocio-economicimpactsoftheEbolavirusdisease.AttheendofJune2014,therevenuecollectedwasbelowtheintendedtargetofnearlyUS$76millionduetothedeclineinminingrevenue,importdutiesandincometax.TheoutbreakoftheEbolavirusdiseasecausedanincreaseinwagebillduetounbudgetedrecruitment,expensestostemtheEbolaoutbreakwhichwasalsonotbudgetedforandhigherexpensescomparedtotheinitialestimatesofgoodsandservicesanddomestic public investments.

58. Theimprovementinthebalanceofpaymentsobservedin2012-2013extendedtothefirsthalfof2014.Thegrowthin2014wasduetohigherexportearningsthankstotheriseinironoreproductionandlowerimportsofminingequipment.Thecurrentaccountbalancedeterioratedduringthesecondhalfof2014duetolowerpricesofironoreandrisingimportsofpharmaceuticalproductsandotheritemstocombattheEbolavirusdisease.Therewasalsoasignificantincreaseincapitalinflowsinthesecondhalfof2014whichhelpedimprovethepositionofthebalanceofpaymentsandbudgetsupportfromdevelopment

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partnersofSierraLeone.Thepressureofdemandontheforeignexchangemarketresultedinadeprecia-tionoftheLeonefrom2%inJuly2014to13.54%inDecember2014.

Togo

59. RealGDPgrowthratewas5.5%in2014thankstothedynamisminallsectors.Theprimarysectorre-cordedagrowthrateof14.9%andthistrendisattributedtotheincreaseinfoodproduction.Growthinthesecondsectorstoodat3.9%owingtotheaccelerationintheproductionofclinkerandphosphate.Growthinthetertiarysectorstoodat4.4%duetodevelopmentsintradeandservices.Onthedemandside,growthwasdrivenbyprivatefinalconsumption,privateinvestmentsandnetexportsofgoodsandservices.

60. Inflationratein2014settledat0.2%against1.8%in2013.ThisdeclineininflationoccurredinalmostalltheUEMOAcountries.

61. Withregardstopublicfinances,therewasanincreaseingovernmentrevenueby7.8%partlyduetothe6%riseintaxrevenues.Governmentspendingclimbedby11.9%.Thisincreaseingovernmentspendingwasduetotheriseincapitalexpendituresby24.9%,currentexpendituresby4.7%and6.8%forwages.Thetaxpressurerateof20.4%in2014wasinlinewiththenewstandardsetbyUEMOA.Expenditureforthepresidentialelectionsandthehighsocialdemandarethereasonsbehindtheincreasedpublicspending.Theratioofwagebilltotaxrevenuewhichwas33.3%enabledthecountrytoalsomeetthisUEMOAconvergencecriterion.Thebudgetbalancestoodat -2%ofGDP, thusmeeting theUEMOAconvergence criterion.

62. Withregardstotheexternalsector,thebalanceofthecurrenttransactionswasindeficitbecauseofthetradedeficit.ThecapitalaccountandfinancialaccountrecordedasurplusofCFAF111.8billionandCFAF70.3billionrespectively.Inall,thebalanceofpaymentwasindeficitin2014.

63. Themonetarysituationwasmarkedbythedeclineinnetforeignassets,increaseincredittotheeconomynotablyinthebuildingandpublicworkssubsector,tradeandservicesaswellastheexpansioninmoneysupply.

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B. Tables and graphs

Table 4 : Real GDP Growth

2012 2013 2014* 2015**

Benin 5.4 5.6 5.5 5.2

Burkina Faso 9 6.6 4.5 6.8

Côted’Ivoire 10.7 8.7 9 7.9

Guinea Bissau -2.2 0.3 2.6 4

Mali 0 1.7 5.9 4.8

Niger 11.1 4.1 7.1 4.9

Senegal 3.4 3.5 4.5 4.6

Togo 5.9 5.1 5.6 5.7

UEMOA 7 5.7 6.6 6.2

Cape Verde 1.2 0.5 1 3

Gambia 5.3 6.3 -0.24 7

Ghana 8.8 7.1 4.5 4.7

Guinea 3.8 2.3 1.3 4.1

Liberia 8.3 8.7 0.3 4.5

Nigeria 4.3 5.4 6.2 7.3

SierraLeone 15.2 20.1 6.6 9.9

ECOWAS 5.1 5.7 6.7 6.9

Source: / ECOWAS Annual Report, 2014, National Authorities, IMF, Regional Economic Outlook, October 2014

Table 5: Consumer prices (End of period, percentage change)

2012 2013 2014* 2015*

Benin 6.8 -1.8 4 2.8

Burkina Faso 1.6 0.1 2 2

Côted’Ivoire 3.4 0.4 1.6 1.6

Guinea Bissau 1.6 -0.1 1.3 2

Mali 2.4 0 1.5 2.6

Niger 0.7 1.1 -0.3 1.2

Senegal 1.1 -0.1 1.4 1.5

Togo 2.9 1.8 2 2.7

UEMOA 2.7 0.1 1.7 1.9

Cape Verde 4.1 0.1 2 2.5

Gambia 4.9 5.6 5 5

Ghana 8.1 13.5 18.5 15.1

Guinea 12.8 10.5 9.4 7.1

Liberia 7.7 8.5 13.1 8.1

Nigeria 12 7.9 9 8.5

SierraLeone 12 8.5 10 9.5

ECOWAS 10.2 7.2 8.6 7.9

Source: IMF, Regional Economic Outlook, October 2014

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Table 6: Overall fiscal balance excluding grants (As percentage of GDP)

2012 2013 2014 2015

Benin -2.3 -3.1 -3.6 -3.3

Burkina Faso -8.1 -9.4 -8.2 -8.3

Côted’Ivoire -3.7 -3.6 -4.6 -5.1

Guinea Bissau -5 -7.2 -10.5 -8.4

Mali -1.4 -6.5 -10.1 -7.7

Niger -7.5 -11 -13.7 -12.1

Senegal -8.5 -8.1 -7.9 -6.9

Togo -8.8 -7.6 -7.6 -6.7

UEMOA -5.3 -6.2 -7 -6.7

Cape Verde -13.1 -11.5 -12.7 -12.2

Gambia -13.4 -10.7 -10.1 -8

Ghana -13.7 -10.5 -9.5 -7.7

Guinea -6 -6.7 -6.8 -4.7

Liberia -4.2 -7.2 -12.7 -12.5

Nigeria 0.4 -2.3 -1.7 -2.2

SierraLeone -9 -4.9 -8.1 -7.8

ECOWAS -1.6 -3.5 -2.9 -3.1

Source: IMF, Regional Economic Outlook, October 2014 & Country Data

Table 7 : Mo Ibrahim Index

Country Overall score in 2014

Benin 56.67

Burkina Faso 53.28

Cape Verde 76.59

Côted’Ivoire 44.32

Gambia 51.55

Ghana 68.17

Guinea 43.28

Guinea-Bissau 33.23

Liberia 49.34

Mali 49.47

Niger 49.44

Nigeria 45.82

Senegal 64.33

SierraLeone 51.13

Togo 46.45Source; Mo Ibrahim Foundation, 2015

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Table 8: Human Development Index

Country Score Rank

Cape Verde 0.636 123

Ghana 0.573 138

Nigeria 0.504 152

Senegal 0.485 163

Benin 0.476 165

Togo 0.473 166

Côted’Ivoire 0.452 171

Gambia 0.441 172

Liberia 0.412 175

Mali 0.407 176

Guinea-Bissau 0.396 177

Guinea 0.392 179

Burkina Faso 0.388 181

SierraLeone 0.374 183

Niger 0.337 187

Source: UNDP, 2015

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Figure 16 : Business climate in West Africa compared with other countries

8.57 24.83

33.23 38.42

40.93 42.06 43.28 43.37 44.32 45.82 46.45 47.65 48.49 49.34 49.44 49.47 50.98 51.11 51.13 51.55 52.2 53.28 54.38

56.67 57.4

60.36 62.26

64.33 65.99

68.17 70.26

73.24 73.29

76.19 76.59

81.71

0 10 20 30 40 50 60 70 80 90

Somalia Central African Republic

Guinea-Bissau Equatorial Guinea

Angola Libya

Guinea Congo-Brazzaville

Côte d'Ivoire Nigeria

Togo Cameroon

Ethiopia Liberia

Niger Mali

Gabon Egypt

Sierra Leone Gambia

Mozambique Burkina Faso

Algeria Benin Kenya

Rwanda Lesotho Senegal Tunisia Ghana

Namibia Seychelles

South Africa Botswana

Cape Verde Mauritius

Source: Doing Business Database, 2015