West African growth forecast slips on new crises

ABIDJAN – A robust growth forecast for the West African Economic and Monetary Union will likely be dampened by new political turmoil in the region despite a post-war revival in Ivory Coast, a top International Monetary Fund official said on Thursday.

Ivory Coast, the dominant economy in the eight-country bloc, is emerging from a decade-long political crisis that led to economic stagnation in the world’s top cocoa producer. The crisis ended last year after a brief civil war that left some 3 000 dead and saw the economy shrink by 4,7 per cent for 2011.An economic turn-around fuelled by billions of dollars in donor support and heavy investment in large public works projects is currently underway, however, and the IMF is forecasting 2012 growth at over 8 percent. That growth had been expected to buoy the outlook for the economic union as a whole.’Given the strong growth in Ivory Coast, we expected growth to be somewhere around six per cent or so, maybe even a touch higher…2012 was shaping up to be a very good year,’ Roger Nord, deputy director of the Fund’s African department said in an interview.’Unfortunately, the locomotive role that Ivory Coast can now start playing is at least partially offset by the renewed conflict in Mali and in Guinea Bissau,’ he said. Mutinous soldiers toppled the government in Mali on March 22, unintentionally paving the way for rebels to capture the country’s north. Efforts by regional neighbours to broker a deal to reinstate a civilian government in the capital, Bamako, have met with repeated setbacks.The military took control in tiny, coup-plagued Guinea Bissau during an overnight putsch just weeks later. And while power was handed back to civilian authorities at the weekend, disagreements remain over how the post-coup transition should be handled.The political instability is expected to have grave consequences for the economies of the two countries. And the unrest, particularly in Mali where growth was already seen as falling close to zero this year due to a prolonged drought, is likely to weaken the forecast for the economic bloc as a whole.’I think we will probably have to reduce [the growth forecast] somewhat but not hugely because of Mali…Guinea Bissau is very small, so that is going to be negligible,’ Nord said. – Nampa-Reuters

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