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Insight & Analysis - March 1, 2022

African Economy: Here are the Strongest Countries

Industries in African countries with the strongest economy are projected to generate $29 trillion by 2050.

Many countries are slowly recovering from the impacts of the COVID-19 pandemic, which has wreaked havoc on the global economy. Africa is the continent that has suffered the least economic damage. Although most of the African economy is weak and poverty is widespread, the continent is home to some of the world’s fastest-growing and strongest economies.

The most important sectors of the African economy includes agriculture, commerce, and natural resources. These industries are expected to generate more than $29 trillion in the gross domestic product (GDP) in 2050.

Here is a look at the 5 African economies and 5 countries that are the strongest. This is based on the current GDP information from the International Monetary Fund (IMF) and the World Bank.

5. Morocco 

With a GDP of almost $119 billion, this country’s economy is diverse and steady, with growth over the last decade. It is Africa’s second-richest non-oil-producing country. Mining and manufacturing are the mainstays of the country’s economy. Morocco’s GDP is made up of 30% industries, 15% agriculture, and 55% services, with a developing tourist sector to round out the picture.

Morocco is the world’s third-largest producer of phosphorus and is primarily reliant on agriculture.

The country has reaped significant benefits from its diverse exports, including electrical equipment, vehicles, and car parts. In addition, the telecom and textile industries contribute significantly to the economy.

4. Algeria

With a GDP of $170 billion, this large country on the continent is located in the north.

The country has a strong economy and well-developed infrastructure, contributing to a noteworthy success of lowering poverty by 20% in the last 20 years.

Crude oil deposits abound in this sub-Saharan African country, and the economy is strongly reliant on it, so much so that hydrocarbons, such as oil and natural gas, account for about 70% of the country’s revenue. The recent finding of more crude oil reserves has boosted this rapidly growing industry.

Agriculture, industrial activities, commercial services, and construction are other industries that makeup Algeria’s economy. In addition, the country is one of Africa’s top suppliers of ammonia.

3. Egypt

For many years, this ancient region in northern Africa has had the strongest economy on the continent. However, the economy was seriously affected, and foreign exchange reserves plummeted due to the Arab uprising in 2011.

Egypt is one of Africa’s most powerful economies, with a recent GDP of over $300 billion.

Over the current decade, economic activity has stabilised, resulting in positive economic growth.

Recently, the government and the International Monetary Fund (IMF) completed an economic reform program to boost the economy.

In 2019, real GDP growth increased to 5.6%, up from 5.3% in 2018. Unemployment has decreased, and the country’s foreign exchange reserves have improved, as have increased exports of goods and services and a bolstered tourism sector, all of which have aided its development.

2. South Africa

South Africa’s economy is highly developed, with a GDP of about $359 billion and excellent infrastructures. The country is considered one of the strongest and fastest-growing economies in Africa. South Africa, dubbed the “Rainbow Nation,” is one of the few countries on our list that does not rely on a single revenue stream.

Important industries in the country include mining, manufacturing, financial services, and tourism. Natural resources and raw material exports such as gold, diamonds, platinum, coal, and iron ore are also plentiful. Political and geopolitical turbulence, on the other hand, has hampered its capacity to reach its full potential.

1.  Nigeria

Nigeria, a West African country with over 200 million people, is an important part of the African economy, with a GDP of just under $450 billion, making it Africa’s richest country.

According to OPEC, the key drivers of the large GDP are finance, transportation, infrastructure, tourism, and an abundance of crude oil, the country exports over 1.6 million barrels of crude oil per day, making it Africa’s largest crude oil exporter.

Petroleum exports account for 10% of overall GDP and more than 80% of the sector’s revenue.

Nigeria has an abundance of raw materials and natural resources, including coal, limestone, zinc, lead, tin, natural gas, niobium, and iron ore, in addition to petroleum, which contributes to the country’s prosperity.

There is also a vast fertile area for agriculture, which generates approximately 20% of the country’s GDP through producing cocoa and rubber. Nigeria’s enormous population has helped the country to become Africa’s largest consumer store, and its digitally savvy citizens have contributed to the country’s rapidly rising tech sector. 

According to the World Bank, Nigeria’s GDP expanded at a pace of 7% per year between 2000 and 2014, making it one of the fastest-growing economies in Africa. However, due to political insecurity, socio-economic challenges, oil and production shocks, growth has slowed to 2% in recent years.

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