Inside the next economic frontier: The coastal nations of West Africa

Africa is the next growth frontier, and the coastal nations of West Africa are de-risking their socioeconomic climate, thereby positioning themselves for anticipated growth. Global brands seeking to boost their competitive advantage must leverage the opportunities in this sub-region.

Like the rest of sub-Saharan Africa, West Africa's coastal nations are experiencing a surge of potential and opportunities due to their rapidly growing population (consumer market), rapid urbanization, political stability, and strong economic growth. According to the World Bank, the region's gross domestic product (GDP) grew by an average of 5.5% between 2010 and 2020, outpacing the global average. The ECOWAS Region's GDP is projected to grow at 4.3% in 2022 and 5.2% in 2023. The region's young, literate, and the tech-savvy population is driving this growth and creating business opportunities. The International Telecommunication Union (ITU) reports that the region has a mobile penetration rate of over 90%, with a growing number of internet users and strong demand for digital services.

The outlook for the region, which is rich in resources, is positive, with young entrepreneurs leading the way in addressing societal issues through their innovation, determination, and perseverance. The rising middle class, improved infrastructure, and good education make the region an attractive place for investment. The growth of megacities along the coast, such as Lagos, Accra, and Abidjan, offers opportunities for global brands to participate in social development initiatives. The countries of West Africa (Ghana & Ivory Coast) are diversifying their economy while forming public-private partnerships (Nigeria & Senegal) to close infrastructural gaps.

The sub-region has strategically positioned itself for growth through unique regional integration. The Economic Community of West African States (ECOWAS) fosters regional integration amongst member states. Through the West African Power Pool and West African Gas Pipeline, the sub-region is looking to the future to ensure resource and infrastructure integration to solve societal issues. The region is also developing the Trans-West African Highway. This 1,028km coastal highway is expected to cost $15.6bn and will connect Lagos in Nigeria with Abidjan in Ivory Coast through Benin, Togo and Ghana. With an organized and integrated infrastructure and governance, the region is looking into the future and positioning itself for development.

The African Continental Free Trade Area (AfCFTA), which came into effect in 2021, is a crucial step toward promoting regional trade and integration. Arable land, superb weather and an agriculture-centric society in the sub-region make it a good location for ag-tech investments. The region accounts for the highest production of cocoa beans and significant production of shea butter, cashew nut, fruits and other food crops. The region also has an underdeveloped hospitality industry (tourism) which is waiting to be explored. Senegal, Ghana and The Gambia are the regional heavyweights in tourism. However, there are well-developed resources in Nigeria catering to local and international visitors, like the Tinapa Resort, Obudu Mountain Ranch, Ikogosi Warm Springs and resort (in my native Ekitiland) and many others in Lagos.

Investors must shift their strategy from an exploration and exportation framework to localization of their value chain through exploration, processing raw materials and developing finished goods. Nations in the global north must include Africa in their foreign policy not for aid and donation only but also for dual-way partnership and collaboration to aid FDI from international brands. This approach helps avoid the classic one-sided gains and creates a win-win situation for hosts and investors.

With all the growth in the last couple of decades, there is still much work to be done, and several risks still abound. The government must invest in human capacity development, security, governance, and infrastructure to take advantage of these opportunities. According to the African Development Bank, the region needs to invest $130 billion in infrastructure development over the next decade to support its economic growth and improve the lives of its citizens. West African countries must also promote regional integration and national development through solid democratic institutions and governance, improved infrastructure, trade facilitation, education, security, and strong public service.