Economy
AfDB Forecasts 4% GDP Growth for West Africa in 2023
By Adedapo Adesanya
The African Development Bank has said the West African region is projected to grow by 4 per cent in 2023 and 4.3 per cent in 2024, slightly lower than continental average growth rates of 4.1 per cent and 4.4 per cent, respectively.
In its 2023 West Africa Economic Outlook report released on Tuesday, the lender said West Africa experienced slower economic growth over the past year except for Cabo Verde, The Gambia, Guinea, Mali, and Niger.
In the outlook, the AfDB said the GDP growth outlook for the region is positive and that the three largest economies in the region, Nigeria, Ghana, and Côte d’Ivoire, are projected to account for over 82 per cent of the regional output.
The report assessed the economic performance of 15 West African countries, namely: Benin, Burkina Faso, Cabo Verde, Côte d’Ivoire, The Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, and Togo.
In terms of country groupings, regional growth is expected to be driven by the non-resource-intensive economies (7.2 per cent) like Benin, Cabo Verde, Côte d’Ivoire, the Gambia, and Senegal, while other resource-intensive economies (4.8 per cent) and oil exporting countries (3.3 per cent).
The high growth performance in non-resource-intensive economies could be attributed to the diversified nature of the growth base (Côte d’Ivoire and Senegal) and good policy management in others.
The report notes that West Africa’s average gross domestic product decelerated to 3.8 per cent in 2022 from 4.4 per cent in 2021, implying that the growth recovery from the 2020 downturn had slowed.
The report attributes decelerating growth to, among other factors, such successive shocks as the resurgence of COVID-19 in China, a major trade partner for the region’s countries. Russia’s invasion of Ukraine has also spurred inflationary pressures on the cost of food, fuel, and fertiliser in many West African region countries.
The report further reveals that advanced economies have also tightened monetary policy, which has heightened aversion to risk globally and increased exchange rate pressures.
“Therefore, amid already high policy rates (e.g., policy rate of 18% in Nigeria, 29% in Ghana, and 19% in Sierra Leone), further rate hikes might do more harm than good to growth prospects,” it warned.
The report noted that adapting to climate change and the depletion of the region’s natural resources present an opening for businesses and governments to embrace sustainable and green growth.
“West Africa has enormous potential to achieve green growth, green industrialisation being the most obvious pathway. The rationale for green growth across the region is quite comprehensive: climate change impacts and risks, natural capital depletion, poverty, and food insecurity, as well as limited employment creation and many capital-intensive enclaves.”
Speaking on this, AfDB’s Chief Economist and Vice President for Economic Governance and Knowledge Management, Mr Kevin Urama, said multiple challenges had led to rising interest rates and were compounding debt service payments to African countries.
He explained that these included climate change, inflation driven by higher prices of energy, commodities, and disruption of supply chains, as well as the tightening of monetary policy in the United States and Europe.
Mr Urama added that greater effort would be needed in Africa to mobilise domestic resources and private sector financing to help countries achieve climate and green growth transitions.
“Africa is being short-changed [in] climate financing. The continent will need between $235 billion and $250 billion annually through 2030 to meet investments under its nationally determined contributions. Yet, Africa received only about $29.5 billion in climate financing between 2019 and 2020,” he said.
By Adedapo Adesanya
Africa-focused fintech company PalmPay has joined the ranks of unicorn startups after attaining a valuation of more than $1 billion, as the digital payment platform prepares for a potential initial public offering (IPO) in Hong Kong.
According to a report by Bloomberg on Tuesday, citing people familiar with the matter, the Hong Kong-headquartered company is in advanced discussions to raise about $200 million in a new funding round that would cement its unicorn status and support its next phase of expansion.
The planned fundraising comes as PalmPay accelerates its growth strategy across Africa and Asia, while positioning itself for a public listing that could become one of the most significant fintech IPOs involving an Africa-focused company in recent years.
PalmPay’s move follows a period of rapid growth in Nigeria, where it has become one of the country’s largest digital financial services providers. Alongside OPay and Moniepoint, the company forms the trio that dominates Nigeria’s retail digital payments and agency banking market, a segment driven by millions of point-of-sale (POS) transactions processed daily.
With PalmPay’s latest valuation milestone, all three leading Nigerian fintechs have now achieved unicorn status. While OPay has previously disclosed plans to pursue a listing in the United States, Moniepoint has remained focused on expanding its banking and business services without publicly indicating IPO ambitions.
Founded in 2019 after securing a Mobile Money Operator (MMO) licence from the Central Bank of Nigeria (CBN), PalmPay has built one of the country’s fastest-growing fintech ecosystems. The company says it now serves more than 35 million registered users and over 600,000 merchants, supported by an extensive network of more than 500,000 mobile money agents nationwide.
The platform offers a broad suite of financial services, including peer-to-peer transfers, bill payments, airtime purchases, savings, credit products, merchant payment solutions and agency banking services. PalmPay says it processes as many as 15 million transactions daily, reflecting the increasing adoption of digital payments across Nigeria.
Beyond its home market, the fintech has expanded into Tanzania, Ghana, and Bangladesh, underscoring its ambition to become a leading emerging-market digital bank. Industry analysts view the expansion as part of a broader strategy to diversify revenue streams while replicating its Nigerian success in other underbanked markets.
PalmPay has attracted backing from prominent global investors, including Taiwanese semiconductor manufacturer MediaTek and smartphone maker Transsion Holdings, whose Tecno, Infinix and itel brands command significant market share across Africa. Their support has helped PalmPay leverage smartphone penetration to drive financial inclusion through mobile-first banking services.
As part of efforts to strengthen its leadership ahead of its next growth phase, PalmPay recently appointed Mr Samuel Oluyemi as Chief Operating Officer (COO) for its Nigerian business. Mr Oluyemi joined the company after more than two decades at the Nigeria Inter-Bank Settlement System (NIBSS), where he played key roles in developing the country’s digital payments infrastructure.
If completed, the fundraising and eventual Hong Kong listing would further underscore growing international investor confidence in African fintech companies despite a more cautious global venture capital environment. The proceeds are expected to support PalmPay’s geographical expansion, deepen its product offerings, invest in technology infrastructure and strengthen its competitive position in Africa’s rapidly evolving digital financial services industry.
By Adedapo Adesanya
Market bellwethers, Central Securities Clearing System (CSCS) Plc and FrieslandCampina Wamco Nigeria Plc, lifted the NASD Over-the-Counter (OTC) Securities Exchange by 2.08 per cent on Monday, August 3.
CSCS Plc, the Nigerian securities depository company, gained N10.00 to close at N112.00 per share compared with the previous session’s N102.00 per share, and FrieslandCampina Wamco Nigeria Plc advanced by N4.71 to quote at N152.64 per unit versus last Friday’s N147.93 per unit.
As a result, the NASD Security Index (NSI) added 92.14 points to finish at 4,523.85 points compared with the preceding session’s 4,431.71 points, and the market capitalisation appreciated by N55.31 billion to N2.715 trillion from N2.659 trillion.
Business Post reports that the price of MRS Oil Plc crashed during the trading day by N12.00 to N120.00 per share from N132.00 per share, and UBN Property Plc dipped by 3 Kobo to N1.90 per unit from N1.93 per unit.
Trading data showed that the volume of securities exchanged rose by 113.1 per cent to 1.5 million units from 690,990 units, and the number of deals climbed by 19.2 per cent to 31 deals from 26 deals, while the value of securities slid by 13.1 per cent to N65.2 million from N75.0 million.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and CSCS Plc with 76.8 million units traded for N5.5 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units exchanged for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Adedapo Adesanya
The Nigeria Revenue Service (NRS) has introduced a 1.5 per cent stamp duty on eligible virtual asset transactions, with the tax deducted directly from the cryptocurrency purchased before it is credited to the buyer’s wallet.
According to the new guidelines issued on Monday, anyone buying Bitcoin (BTC), USDT or other cryptocurrencies in Nigeria will receive fewer digital assets due to the deduction.
This requires registered crypto exchanges and other Virtual Asset Service Providers (VASPs) to withhold the levy in the digital asset being traded and remit it to the government, marking Nigeria’s most comprehensive move yet to bring cryptocurrency transactions into the country’s tax net.
Unlike traditional taxes deducted from a customer’s bank account, the 1.5 per cent charge will be taken from the cryptocurrency itself, meaning buyers will receive less Bitcoin, USDT or other tokens than they paid for.
The tax body stated that “income tax deducted at source and stamp duty shall be remitted to the service in the originating token of the transaction.”
Besides the new stamp duty, the guidelines also clarify how income tax, Value Added Tax (VAT) and other tax obligations will apply to virtual asset activities such as trading, staking, mining and other crypto-related transactions.
To illustrate the new rule, the tax authority said a buyer who pays N1 million for one Bitcoin will receive only 0.985 BTC after 0.015 BTC is deducted as stamp duty and remitted to the government. When that Bitcoin is later sold, the next buyer will also have 1.5 per cent deducted from the cryptocurrency credited to their wallet.
The NRS said the guidelines are intended to provide clarity for taxpayers, crypto exchanges, peer-to-peer (P2P) marketplace operators, financial institutions, tax consultants and all participants in Nigeria’s virtual asset ecosystem.
According to the guidelines, the 1.5 per cent duty applies to eligible virtual asset transactions facilitated through registered exchanges and other recognised intermediaries. Where a cryptocurrency is used to complete a transaction that already attracts stamp duty under the law, the applicable duty on the underlying instrument will also be payable.
For crypto users, the implication is higher transaction costs, as eligible purchases will attract the 1.5 per cent stamp duty, while VAT on exchange service fees and income tax on taxable gains may also apply, depending on the nature of the transaction.
