ECONOMIC TECTONICS

World Bank projects impressive growth for Senegal in 2023

While the World Bank projects growth in most African nations, critical economies like Nigeria, South Africa, and Kenya will record a slump

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The Sangomar oil field near Dakar is expected to produce its first oil in 2023
The Sangomar oil field near Dakar is expected to produce its first oil in 2023
Photo: John Schults (Reuters)

The World Bank projects an impressive 2023 for Senegal’s economy, thanks to a thriving oil and gas industry.

“After slowing to 4.8% in 2022, growth in Senegal is projected to jump to 8.0% in 2023 and firm to 10.5% in 2024,” the World Bank states. Next year’s growth will surpass the country’s historical high of 8.9% recorded back in 1976.

Senegal’s rise is attributable to a stronger export portfolio due to a pick-up in private investment in the mining sector with the first gas project coming onstream by the end of 2023.

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The west African nation projects to earn $1.4 billion in oil and gas revenue by 2025, with its Greater Tortue Ahmeyim gas project set to produce 7.5 million tons of liquefied natural gas in the first and second phases.

Senegal’s growing mining sector produces phosphates, gold, mineral sand, manganese, and industrial clay that accounted for 40% of the country’s export revenue in 2019. Its GDP stood at $27.6 billion in 2021 with a population of 17.9 million as of Jan. 10.

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Côte d’Ivoire is projected to bounce back from 5.7% in 2022 to 6.8% this year, while Cameroon will have a gradual growth of 4.3% in 2023 and 4.6% in 2024, powered by “investment and private consumption.”

Excluding Nigeria, western and central African economies will grow at 5.0% in 2023 and 5.6% in 2024 (up from 4.2% in 2022). Nigeria’s economic growth is expected to slow down with the World Bank stating that the country will continue “to suffer from an underperforming oil sector.”

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The report projects a growth in eastern and southern African subregion of 4.5% this year and 5.0% in 2024.

Sub-Saharan Africa’s GDP growth rate will rise to 3.5% in 2023 and 3.9% in 2024 but World Bank warns governments against sinking deeper into debt, which accounted for “59.5% of GDP in 2022.” China was forced to waive debts for 17 African countries last year.

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With many African currencies losing value against the US dollar in 2022, save for Zambia’s kwacha, low export capacity and sustained inflation will cause economic difficulties for the continent in 2023.