Insight & Analysis - February 22, 2022

5 Fastest Growing Economies in Africa

The pace of growing economies in Africa has been at a robust and healthy rate of 3.8 percent.

The pace of growing economies in Africa has been at a robust and healthy rate of 3.8 percent. This is following the continent’s worst recession in 2020. The growth rate is as a result of increased global demand, unexplored market potential, a rebound in commodity prices, and a rise in oil prices.

East Africa, which had the hardest hit by the third wave of the COVID-19, is predicted to record a 3.4 percent growth in GDP in 2022.

West and Central Africa’s growth is predicted to increase to 3.6 percent in  2022, up from -0.8 percent in 2020 and 2021. Nigeria’s economy is expected to increase from 3.4 percent in 2021, mainly due to improved oil and non-oil sector performance. 

The West African Economic and Monetary Union, excluding Nigeria, is expected to grow at 6.1 percent in 2022, indicating favourable trade terms.

According to GlobalData, Morocco, Kenya, Ghana, Egypt, and South Africa, will have the fastest growing economies in Africa in 2022, with all of them expected to expand at or over 4% real GDP.

Here are 5 fastest growing economies in Africa.

Morocco

Morocco has made huge strides forward in recent years, providing the world with bountiful produce after a promising agricultural season. The country’s predicted growth of 5.19 percent was affected by a successful immunization campaign, accommodating monetary policies, and fiscal stimulants.

Lately, Morocco has been in negotiations with a number of international partners in a variety of industries. Foreign investors and big international corporations like Tesla, Europa Oil & Gas, and Boeing are growing interested in the country’s expansions in the automotive, renewable energy, and mining industries.

Kenya

Kenya was one of the fastest-growing economies in Africa before the COVID-19 pandemic, with a yearly average growth of 5.9% between 2010 and 2018. Kenya has recently achieved lower-middle-income status, with a GDP of $95 billion, and has effectively developed a broad and dynamic economy. It also acts as a gateway to the wider East African market of 300 million people.

The achieved status has been supported by adequate agricultural harvests, a recovery in global demand, partial recommencement of international travel, and a broad-based recovery in manufacturing have all contributed. 

Ghana

The COVID-19 pandemic, the March 2020 shutdown, and a dramatic drop in commodity exports all slowed Ghana’s rapid growth. The economy grew at an average of 7% from 2017 to 2019, before contracting sharply in the second and third quarters of 2020.

Due to rising commodity prices and robust domestic demand, Ghana’s economy is expected to gradually recover over the medium term. Ghana got $1 billion in SDRs from the IMF recently, a portion of which would be used to aid economic recovery. 

In the years 2021-23, annual growth is predicted to average 5.1 percent. Real per capita GDP is expected to rebound to pre-COVID-19 levels in 2021, after dropping by 1.7 percent in 2020.

Egypt

Egypt’s economy increased at its fastest rate in two decades in the first quarter of 2021-2022, as the country recovered from a drop in activity caused by the covid-19 outbreak last year. During the July-September period, GDP grew at an annual rate of 9.8%, boosted by a prolonged rebound in the country’s hospitality industry and better industrial activity.

Egypt was one of the few developing market economies to grow in 2020, according to the International Monetary Fund (IMF), because of the government incentives and support for sectors severely hit by the COVID-19 pandemic.

South Africa

After a decade of low development, the South African economy was already in poor shape when the pandemic struck. The economy increased by 0.1 percent in 2019, owing in part to the revival of load shedding due to operational and financial challenges at Eskom, the energy company.

Pre-existing structural impediments, such as electricity shortages, are, nonetheless, still a drag on the medium-term prospects. In 2021, the economy is predicted to increase at a rate of 4.0 percent. Commodity prices will continue to be crucial for South Africa, which is a large net producer of minerals and a net importer of oil. However, boosting investment, notably foreign direct investment, will be critical for accelerating growth and creating jobs.

READ MORE: Top 5 African Countries with Functional Refineries 

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