TheCable

The African Development Bank (AFDB) says the growth experienced by West African countries is “jobless growth” as it has not resulted in the creation of jobs.

In the African Economic Outlook released on Wednesday, the bank advised countries to be disciplined when using sovereign bonds.

“Although West Africa’s growth has been impressive, much of it came from increased primary commodities production, which does not create much productive employment and can lead to jobless growth,” the report read.

“The debt service ratio—the percentage of export revenue used for external debt repayment— is estimated to have grown in 2015–17, mainly due to larger debts. The growth will restrict the region’s fiscal space.

“Changes in aid architecture require high fiscal discipline to avoid larger debts. In particular, the growing finance of development through sovereign bonds requires much stricter discipline to avoid near-term debt.

“Financial flows to West Africa continue to increase through remittances and foreign direct investment.

“But many countries, heavily indebted with long-term non-concessional loans, will face financing difficulties unless they also mobilize domestic revenue better by reforming their revenue authorities.”

The bank projected that growth in West Africa will rise to 3.8 percent in 2018 and 3.9 percent in 2019.

It said economic growth in West Africa stagnated at 0.5 percent in 2016 but rebounded to 2.5 percent in 2017, adding that household consumption and the relative price recovery of certain materials are expected to contribute to this performance.