Figure 1.20: Evolution of the Current Account

The West and Central Africa subregion presents a similar picture. Industrial activity in Nigeria was partly affected by the measures implemented to contain the spread of the Delta variant. The outbreak of the third wave of the virus weighed on activity more recently, but the economy emerged with a steady recovery in visits to retail and recreation outlets, and the PMI increased to 55.4 in July. The oil sector contracted by 12.7 percent as oil production declined from 1.81 million barrels per day in 2020Q2 to 1.61 million barrels per day in 2021Q2. Côte d’Ivoire faced new outbreaks of bird flu in addition to the spread of the Delta variant. Industrial production faded in 2021Q2, after strong activity in the first quarter. Despite the resurgence in cases, the retail sector continued its recovery, with visits to retail and recreation outlets continuing their upward trajectory. The government has also stepped up its vaccination plan, with nearly 2 million vaccinated of 2.6 million vaccine doses received as of September 25, 2021. High-frequency data from Ghana recorded a small drop in the PMI from 51 in June to 49.7 in July. Mobility figures suggest a further decline in economic activity in August.

External positions are expected to improve in resource-rich countries on the back of rising commodity prices, although commodity market volatility remains.

The current account deficit in the region is estimated to have slightly widened from 5.2 percent of GDP in 2020 to 5.5 percent of GDP in 2021, despite the increase in global commodity prices and the pickup in global trade (figure 1.20). The current account deficit is expected to decline to 5.3 and 5.1 percent of GDP in 2022 and 2023, respectively. However, the regional aggregate of the current account deficit masks considerable heterogeneity across country groups. The current account deficit in 2021 has widened among non-resource-rich countries while it has narrowed among resource-rich ones. The deficit in non-resource-rich countries has widened from 4.3 percent of GDP in 2020 to 5.9 percent of GDP in 2021, and it is expected to stabilize around 5.5 percent in 2022–23. Oil-exporting countries, however, experienced a narrowing of their current account deficit from 6.0 percent of GDP in 2020 to 4.6 percent of GDP in 2021. These countries are also expected to witness marked correction in the current account, turning to a surplus of 0.7 percent in 2022 before going back into deficit territory at -2.4 percent in 2023. This pattern is associated with the higher export proceeds 0 thanks to elevated oil prices. Mineral and metal exporters registered a decline in the current account deficit of 3 percentage points of GDP. Given elevated metal prices that are expected to stabilize at a higher level, metal and mineral exporting countries are expected to reduce their deficit from 7.8 percent of GDP in 2021 to 4.1 percent in 2023.

FIGURE 1.20: Evolution of the Current Account (% of GDP) Source: World Bank staff projections.

2 -2 Percent 6 4 -8 -10 -12 2016 2017 2018 2019 2020e 2021f 2022f 2023f Sub-Saharan Africa, median Oil exporting countries in SSA Mineral and metal exporters in SSA Non-resource-rich countries in SSA

The recovery in the current account deficit of oil exporters is offset by slow recovery of metal exporters and non-resource-rich countries.