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.
Which African country will have the greatest GDP in 2020?
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 Africa wealthy or impoverished?
Africa is regarded as the world’s poorest continent. Almost one in every two people in Sub-Saharan Africa lives in poverty. The poorest members of society, especially children and women, are disproportionately affected by poverty in Africa.
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 $270. The economic situation in Africa may not always be so dire. Over the last two decades, a few African countries have experienced tremendous economic growth and development. Many Africans may have a more promising economic future if this progress can be sustained and expanded. See the table below for a complete list of African countries and its 2020 GNI per capita (Atlas approach, current US$).
What African country is the most powerful?
1. Egypt: Egypt’s population totals 99,413,317 people, with 42,946,553 (43.2 percent) of the population looking for work. Among Africa’s most powerful countries, it is ranked first. The total military population is expected to be over 920,000, with 440,000 active military personnel. In the United States, there are around 480,000 reserve soldiers. Egypt’s air force consists of 1,054 fighter airplanes, 88 attack jets, 59 transport jets, 387 training jets, 11 special purpose jets, 294 helicopters, and 81 assault helicopters. Egypt’s land forces are made up of 4,295 tanks, 11,700 armored vehicles, 1,139 self-propelled artillery, 2,189 towed artillery, and 1,084 rocket launchers.
Why is Gabon so prosperous?
Gabon, a country in central Africa, has a wealth of natural resources. It shares borders with Cameroon, Equatorial Guinea, and the Republic of Congo on the Atlantic Ocean. With a population of 2 million people in 2017 and woods covering 85 percent of its land, it is a sparsely inhabited country.
Gabon, however, has one of Africa’s highest urbanization rates, with more than four out of five Gabonese residents living in cities.
Libreville, the country’s capital, and Port Gentil, the country’s economic powerhouse, are home to 59 percent of the population. According to the 2012 Second Demographic and Health Survey, one in every two Gabonese people is under the age of 20, and the fertility rate in urban regions is four children per woman, compared to six in rural areas.
The Gabonese Democratic Party (Parti dmocratique gabonais PDG) is the most powerful political force in the country. Omar Bongo was president for 41 years, from 1968 to 2009, and his son, Ali Bongo Ondimba, was elected president in August 2009, despite the country’s social catastrophe.
The opposition boycotted parliamentary elections in 2011, but returned in December 2013 to run in municipal and departmental elections, as well as the Senate election in December 2014. Nonetheless, the ruling party won all of these elections. Ali Bongo, the current president, was re-elected on August 31, 2016, in disputed elections with a low voter turnout of 59 percent.
In October 2018, legislative and municipal elections were conducted. Despite losing 15 seats, the ruling party retained its two-thirds majority in the National Assembly, capturing 98 of the 143 seats. The elections came after a constitutional court judgement in April 2018 that dissolved parliament (due to election delays) and forced the government’s resignation in May. A caretaker administration implemented measures (which were codified in an updated 2008 Budget Law) to address Gabon’s deteriorating macroeconomic performance and bloated pay bill.
Several soldiers attempted to seize power on January 7, 2019, taking advantage of the President of the Republic’s protracted absence in Morocco for medical treatment. The ringleaders of this attempted coup were apprehended.
A new administration was sworn in in January 2019, and it was restructured by presidential decree on January 30, June 10, and December 2019.
Gabon is a country with a high standard of living. It is Africa’s fifth largest oil producer, with substantial economic growth over the last decade fueled by oil and manganese output. Over the last five years, the oil sector has accounted for 80 percent of exports, 45 percent of GDP, and 60 percent of fiscal revenue on average. The Gabonese administration, however, has opted to diversify its economy as the country’s oil reserves diminish.
Gabon’s fiscal situation deteriorated in 2015, with the government posting its first budget deficit since 1998. Despite the government’s efforts to cut spending and counteract the drop in oil revenues, Gabon’s economy has slowed, with growth forecasted at 0.8 percent in 2018 compared to 0.5 percent in 2017.
This tendency is due to the limited expansion of the secondary and tertiary sectors, which has been hampered by the reduction in government spending. Higher prices for crude oil, manganese, and rubber, three of the country’s exports, led to the primary sector’s expansion. Non-extractive sectors including agribusiness, as well as enhanced transportation and communication networks, could boost growth to 2.9 percent in 2019.
The COVID-19 situation, as well as the further decrease in oil prices, will stymie this anticipated expansion.
A substantial fiscal deficit will result from a sharp reduction in domestic revenue mobilization, exports, and foreign direct investment.
Gabon’s social spending must likewise be increased. According to a 2013 McKinsey report, over 30% of the population is vulnerable, with monthly salaries below the guaranteed minimum wage of CFAF 80,000 (around $150). In 60 percent of the locations, the survey finds, the socioeconomic situation has deteriorated in terms of access to essential social services (health care, drinking water, and electricity).
Gabon committed to improving its social policy as a result of this report by focusing on three pillars:
- Creating integrated social services for the most vulnerable (elders, orphans, and disabled people);
- Increasing access to essential public services and reducing inequality. Despite having one of the highest net primary enrollment rates in Africa (96.4%), Gabonese education has a low completion rate (37.2 percent ).
Another issue Gabon must solve is the shortcomings of its national statistical system, which lacks credible data on poverty and income distribution, with the most recent data dating back to 2010. The consumer price index is still calculated using data from a 2003 survey of household consumption.
Is Africa more prosperous than India?
On a per capita GDP basis, about 20 African countries are wealthier than India, despite our “bhookha-nanga” reputation of the continent. The majority of these are found in the Sub-Saharan African continent.
Why is Africa so prosperous?
Many African countries had the same GDP as Asian countries in the 1970s after being wrecked by wars and exploited by colonialists. Asia grew rapidly in only 30-40 years, while Africa lagged much behind. Many African countries, particularly those in the Sub-Saharan region, have remained impoverished to this day. The main causes of the impasse are listed below.
Africa is called “rich” or “very rich” in natural resources since it contains more than 30% of the world’s mineral resources, such as gold, diamonds, oil, and gemstones. Tanzania, for example, is famed for its gold, Congo for its copper, Namibia for its uranium, and Botswana for its diamonds (see a map of African minerals). Despite this, approximately half of the population, particularly in the Sub-Saharan region, lives in poverty (earning less than $1.25 per day). For many years, the Central African Republic has been listed as the world’s poorest country, with the lowest Human Development Index (HDI), and the world’s unhealthiest people.
To begin with, Africa lagged behind the Green Revolution to some extent. By investing in agricultural growth, Asian countries, on the other hand, were able to secure food security. This is because, once agriculture is safe, the surplus labor and capital are invested in industrial and service investments, which form the economy’s backbone. Meanwhile, African countries, particularly those in the Sub-Saharan region, confront significant obstacles due to their proximity to the equator, which results in unique land, temperature, and weather conditions, as well as drought, flood, and a lack of farming experience (due to the habituation of gathering and hunting). Cultivation gets more difficult in the farming mindset. In particular, small-scale farming mindsets and small households jeopardize cultivating capabilities, resulting in low output despite nature’s gift of rich soil and good climatic conditions (Sub-Saharan Africa is not as hot as everyone thinks!). Another idea claims that African authorities are not as interested in agriculture development as Asian politicians and technocrats. Rather of developing agriculture, they try to exploit available resources (for example, many agricultural products in Uganda are imported from neighboring nations such as China). Imported goods are even less expensive than domestically produced ones, making domestic products less competitive).
Second, inadequate resource management is caused by corruption, misuse of authority, and inefficiency of competent authorities. The majority of proceeds from resource extraction (oil, coal, gold, etc.) go to political elites, and national income is not dispersed fairly to the lower classes. Furthermore, the trickle-down effect is gradual, and in certain circumstances, it does not occur at all. Economic development, on the other hand, has aided the process of social development in Asian countries, thanks to redistribution measures such as taxation and social welfare programs. The film Blood Diamond attempts to show how huge economic contractors combine with local leaders to exploit not only laborers but also a country’s tremendous resources. Revenue is efficiently utilised in Northern European countries due to governments’ abilities to effectively manage resources, transparency, and accountability. To explain, Nordic countries relied on agriculture and the poor prior to World War II (WWII). They did, however, sell their riches to aid in the reconstruction of Europe and were not seriously harmed by the war. The countries became as developed as they are today because to the leadership of the left-wing democratic party, which focused on social development. Scholars in development studies frequently use a term called “The term “resource curse” is used to characterize countries that have abundant natural resources but are prone to bereavement, war, and trauma. Nigeria’s Boko Haram civil war is a good illustration. However, this isn’t always the case.
Finally, there is the impact of external influences. Following some fieldwork, the World Bank and IMF suggested structural adjustment packages that included investments in socioeconomic development, but only if a market economy and democracy were designed. However, when it comes to the effectiveness of these programs, it can be claimed that they failed badly. The privatization of national firms with capital poured in from Western countries, dubbed neo-colonialism, resulted in local businesses failing, widespread unemployment, and a shortage of output. Furthermore, these programs had a top-down approach rather than a bottom-up one, which seeks answers based on people’s actual needs. As a result, these programs swiftly failed, and the demand for democracy, which ran against to multi-tribal grain/nature/traditions, has caused many African countries to become more divided than ever. After spending some time here, I discovered that instead of explaining their nationality, they might tell the tribe they were born into. Nigeria is another example. There are almost 50 political groups representing various tribes. Internal tensions force the government to focus on acquiring power rather than investing in long-term development projects, despite the fact that only 4-5 major parties contest for election and engage in active operations. Internal disputes and political instability have a substantial impact on investing, executing programs, and establishing uniform policies, despite the lack of clear evidence that the type of state (dictatorship or democracy) is related with a country’s development.
We’ve seen some examples of countries that have a lot of resources but don’t accomplish anything with them throughout this post. In the realm of developers, the expression is referred to as “The curse of resources.” According to Jeffrey Sachs and Andrew Warner’s research, the relationship between resources and economic growth rate is dependent on how revenue is spent, the political system in place, government competency, and whether the country is in the early or late stages of industrialization. As a result, the resource can be considered as either a “curse” or a “gift.” Take, for example, the Nordic countries. After WWII, they effectively transitioned from agro-based economies to industrial economies thanks to efficient utilization of oil and coal, as well as transparency and income equality policies pioneered by the Social Democratic Party. Nigeria, on the other hand, a country rich in oil, began the Boko Haram Civil War over a conflict over resources. Governments and international businesses frequently claim ownership of resources (oil) on indigenous people’s territory (tribes and other tribes). Indigenous peoples, on the other hand, who are undoubtedly the genuine owners of resources, are not benefited by such exploitation. Poverty, a lack of investment in education and health care, corruption, and theological divisions (Islam and Christianity) all contribute to ineffective debates. The Civil War has been raging for over a decade.
Overall, having several tribes makes policy implementation more challenging. The development programs implemented in other countries are more uniform. This reinforces the idea that racial diversity necessitates a more centralized approach to the design of demanding programs. These are the reasons why Africa, particularly Sub-Saharan Africa, is as impoverished as it has been in the past.