The African economy, which includes 54 countries, is expected to be worth $2.7 trillion in nominal terms in 2021, up $296 billion from 2020, according to IMF data. This is $246 billion less than the GDP of France, the world’s seventh largest economy. In nominal terms, Africa accounts for 2.84 percent of global GDP. After Oceania, Africa is the world’s second-smallest continental economy. It is the third smallest continental economy, behind Oceania and South America, accounting for 4.97 percent of global wealth, according to ppp methodologies.
Northern Africa has the continent’s largest GDP ($792 billion), followed by Western Africa ($777 billion). Together, these two regions account for nearly 58 percent of Africa’s economy. Southern Africa accounts for 16.79 percent of African GDP, Eastern Africa for 16.44 percent, and Middle Africa for 8.04 percent.
According to the United Nations, Africa’s contribution of the global economy peaked at 4.93 percent in 1980 and peaked at 1.88 percent in 1995. The African economy has grown from $506 billion in 1970 to $2.6 trillion in 2019, or a 5x increase in constant 2015 prices, which gives a better indication of growth through time.
The greatest increase in African wealth occurred in 2012, when it increased by $157 billion at constant 2015 prices, while the greatest decrease occurred in 2011, when it decreased by $13 billion. In the last four years, the figure has decreased. At current values, the largest increase was $283 billion in 2010, while the largest decrease was $243 billion in 2015. In the last thirteen years, the figure has decreased.
The continents and subregions are grouped according to the United Nations Statistics Division.
What African country has the highest GDP?
Nigeria has the greatest gross domestic output in Africa, with a GDP of 514 billion dollars in 2021. Egypt’s GDP was worth 394 billion dollars, making it the continent’s second-highest.
Is the GDP of Africa high or low?
Approximately half of the African continent is impoverished. Per capita GDP in Sub-Saharan Africa is presently smaller than it was in 1974, having fallen by more than 11%.
Between 1960 and 2002, the rest of the world’s economy developed at a near to 2% yearly rate, but Africa’s performance was abysmal. Growth was negative from 1974 to the mid-1990s, hitting a low of -1.5 percent in 1990-4. As a result, hundreds of millions of Africans have become impoverished, with one-half of the continent living in poverty. Per capita GDP in Sub-Saharan Africa is presently smaller than it was in 1974, having fallen by more than 11%. In 1970, Africa was home to one out of every ten poor people on the planet; by 2000, the figure had risen to one out of every two. In 2000, this trend resulted in 360 million poor Africans, up from 140 million in 1975.
The authors uncover the most crucial elements underlying the disaster by using strong econometric predictors of economic growth in a cross-section of countries. The first source of blame has been a lack of investment. Africa’s investment rate has decreased during the last 40 years. Since 1975, the continent’s investment rate has fallen to 8.5 percent, compared to investment rates of 20 to 25 percent for the average-performing OECD economy and 30 percent for East-Asian nations. Furthermore, the majority of investment was directed toward the inefficient governmental sector. Africa’s investment rate has risen marginally as a result of recent reforms.
Africa does poorly in both education and health, the two key determinants of human capital. The entire primary school enrolment rate in the 1960s was 42 percent, compared to nearly 100 percent in OECD and East Asian countries. Africa’s average 0.9 percent growth rate in the 1960s would have been a lot healthier 2.37 percent, and per capita incomes today would be two-and-a-half times higher than they are now if enrolment rates had been at OECD levels. Since 1960, enrollment rates have improved, implying that economic growth prospects have improved.
In 1960, Africa’s life expectancy was little over 40 years, compared to 67 and 62 for OECD countries and East Asia, respectively. Africa’s annual growth rate would have been 2.07 percentage points higher if it had a life expectancy comparable to the OECD. Similarly, Africa’s annual growth rate would have been 1.25 percentage points higher over the last 40 years if it had not suffered from malaria.
The authors argue that fresh initiatives may be required, citing the failure of large-scale humanitarian operations. More study may, for example, be focused on the continent’s terrible health issues. Africans lack the resources and expertise to develop vaccinations to fight diseases like AIDS and malaria. Rich countries, on the other hand, have little motivation to engage in these areas of research because the findings will benefit individuals who cannot afford to acquire the items. The authors suggest that the situation in Africa may improve if foreign aid funded by bilateral donors and multilateral institutions was redirected to these health issues.
The economic situation in Africa would also improve if the continent’s armed wars, which have plagued it for the past half-century, were to end. Other important factors that could contribute to African economic growth include the maturation of institutions that guarantee the rule of law and property rights; increased educational investments; the reduction of policy distortions that make investments prohibitively expensive; and the reduction of wasteful consumption expenditures.
It is also critical to expose African countries to market forces such as trade and technological diffusion. While African governments can do a lot to open their economies, Europe, Japan, and the United States can help by making it easier for African products to access their markets and decreasing agricultural subsidies.
Income inequality has increased in Africa as a result of its economic stagnation, while it has decreased globally. Regardless of whether one looks at between-country or within-country measures, income inequality occurs. This is due to the fact that the continent’s wealthier states have risen quicker and that wealthy residents in each country have profited more than poor citizens. Nigeria is an excellent example, where the earnings of the poorest 80% of the population have decreased while the incomes of the wealthiest have soared. The wealthy and powerful have little incentive to change their policies as a result of this predicament.
What accounts for Africa’s low GDP?
The apparent persistent character of Africa’s poverty has sparked debate over its causes. The ongoing economic issues are both causes and results of endemic violence and unrest, extensive corruption, and autocratic regimes. Africa’s decolonization was fraught with insecurity, which was exacerbated by Cold War fighting. The Cold War, as well as rising corruption, poor administration, sickness, and dictatorship, have all contributed to Africa’s dismal economy since the mid-twentieth century.
The most crucial elements, according to The Economist, are government corruption, political instability, socialist economics, and protectionist trade policies.
What African country has the lowest GDP?
Burundi is the poorest country not only in Africa, but also in the world, according to per capita GDP and GNI statistics from 2020. Somalia, Africa’s second poorest country, has the same distinction. In fact, much of the list follows this trend. With the exception of Afghanistan, an Asian country with a GNI per capita of $500, which would put it at #6 on the second list, Africa’s ten poorest countries are statistically the world’s ten poorest. To be honest, this ranking comes with one major caveat: it’s probable that more non-African countries, particularly North Korea, Syria, and/or Yemen, might feature in the bottom ten if they disclosed their GDP/GNI data openly, but they normally don’t. African countries, though, would still account for the majority of the list.
When looking at the data in isolation, it can be difficult to appreciate the magnitude of Africa’s economic issues. To put things in perspective, we might look at the GDP figures of the world’s wealthiest countries. Luxembourg has the greatest GDP per capita (PPP int.$) according to 2020 data, with a value of $118,356more than 150 times more than Burundi’s $771. Similarly, Norway’s world-leading 2020 GNI per capita (Atlas method, current US$) of $78,250 appears modest until one considers that it is 289 times larger than Burundi’s $270. The economic situation in Africa may not always be so dire. Over the last two decades, a few African countries have experienced tremendous economic growth and development. Many Africans may have a more promising economic future if this progress can be sustained and expanded. See the table below for a complete list of African countries and its 2020 GNI per capita (Atlas approach, current US$).
Tunisian Dinar
Tunisia’s currency, the dinar, is the most valuable in Africa. This country is also an Arabic country in Northern Africa, and it has one of the most unusual currencies in the world, which attracts foreign corporate investors.
The Tunisian Dinar is tied to the Euro since it is used to construct a single currency with Algeria’s Dinar. This is due to its stability, as it is backed by another country.
Why is Africa so indebted?
The African Development Bank has warned that the COVID-19 pandemic has increased the danger of default across the continent, resulting in higher debt burdens, deteriorating poverty, and wider inequality.
Who is Africa’s best country?
Apart from these parks, Kenya’s natural beauties include exquisite beaches on the Swahili Coast and historic forts and mosques in places such as Mombasa. Kenya has it everything, whether you’re interested in history or nature, and is widely regarded as Africa’s best country.
Senegal
Senegal is one of Africa’s best-kept secrets, with a tiny but growing tourism industry. It also has a fascinating slave-trade history that everyone should learn about in order to avoid repeating past mistakes. Goree Island was originally known as a significant slave-trading fort, but it is now a museum-filled region with colonial relics.
What is Africa’s primary source of poverty?
Corruption and bad governance, poor land utilisation and tenure systems, civil wars and ongoing political disputes, poor infrastructure, diseases and inadequate health facilities, and World Bank and IMF policies, among other factors, all contribute to poverty in Africa.