Africa, as a continent, comprises a huge 54 sovereign states. According to the IMF, Africa is the poorest continent in the world – despite containing a fifth of the total population of our little planet. Despite this, as a continent, Africa’s economy has grown over the last few years. While the rest of the world went through an economic crisis, Africa was something of a “little engine that could”, quietly chugging along at a respectable pace and increasing its total GDP (Gross Domestic Product) annually since the recession hit six years ago. Indeed, the economy of Africa grew by 5% in 2012 while the rest of the world was in the grips of economic recovery.
The secret to Africa’s recent comparative success seems to be its vast amount of natural resources. Everything from cotton to gold to diamonds can be found around the continent. Why has Africa been the poorest continent throughout the years, then? Well, there are countless reports, theories and debates on this topic: Some blame the IMF’s influence and the countries’ crippling debts; others blame large companies for stripping African countries of their natural resources for astonishing profits.
The plight of Africa has been captured in many articles, reports and documentaries but the simple fact is that the majority of Western scholars would struggle to name the top five wealthiest African countries – so focused are we on the poverty. On that note, and in an attempt to focus on the positive, here are the top ten richest countries in Africa. This list uses the GDP at Purchasing Power Parity, as per the CIA World Factbook in 2012, to rank these African countries by wealth.
10 Libya GDP (PPP): $76.52 billion
Libya has dominated our headlines worldwide for the past few years, with their civil war and its aftermath, which has resulted in ongoing violence. What is perhaps less reported in the mainstream media is the booming Libyan economy. Libya’s main economic saviour is a little thing called oil: While the revolution massively impacted on the country’s oil production, 2012 saw Libyans return to their pre-violence levels – an unbelievable 1.6 million barrels of oil per day! This was a significant year for the Libyan economy. Though the political instability remained, 2012 saw Libya increase their gross domestic product by an astonishing 122%.
According to the IMF, Libya’s GDP took an almost 60% plunge into negative figures in 2011, before the 2012 rebound. Oil accounts for 80% of the country’s GDP and 97% of all exports, so it’s a hugely important aspect of this country’s economy. We can’t help but wonder; if it were not for the current political instability, how much further up our list would this country be?
9 Ghana GDP (PPP): $82.65 billion
Ghana might be bringing up the rear of our list but not for long! It’s among the top ten fastest growing economies in the world and tops the African list of fastest-growing economies. Ghana has been a leader of the pack for quite some time now, being West Africa’s first country to gain independence from the colonialism that had virtually taken over Africa back in 1957. The country had a year of celebrations in 2007 to celebrate the Gold Anniversary (pun intended, as you will see later in the article) of their independence.
The main source of Ghana’s economic prosperity is their natural resources: Ghana is Africa’s second-largest producer of gold and also the world’s second-largest producer of cocoa. Who couldn’t love a country that produces gold and chocolate? As is widely known, the value of gold is one of the few things that has steadily risen throughout the global downturn; there seems to be a “Cash for Gold” stand on nearly every street corner these days. As this is one of Ghana’s most prosperous industries, it has undoubtedly contributed to the economic growth the West African nation has enjoyed.
There is currently a “Ghana 2020” visionary programme in place, which aims to see Ghana gain developed status by the year 2020.
8 Tunisia GDP (PPP): $104 billion
Tunisia is one of the more interesting examples on the list. For years, there was heavy state involvement in all aspects of Tunisian life, including the economy. Now, though, Tunisia is going through an economic reform and a liberalization of the state. Tunisia has a wide spectrum of industries that make up its economic landscape and unlike many of its counterparts in Africa, there’s no one clearly dominating industry. Manufacturing, public administration, agriculture, trade and hotels are some of the biggest Tunisian money makers.
Tunisia has experienced a rise in tourism in the past few years, owing to its convenient placement on the Mediterranean coast. Europeans have long been flocking to Mediterranean sun resorts in Spain, France and Italy but during the boom years, Tunisia (and particularly Morocco) became more popular. The appeal, no doubt, is due to the fact that there’s a differing culture from mainland Europe to experience, with that reassuring element of familiarity in proximity.
7 Ethiopia GDP (PPP): $109 billion
Not only is Ethiopia one of Africa’s wealthiest countries, it’s also steeped in history. It is widely regarded as the area where modern man emerged from so, if you trace back far enough, we’re all a little bit Ethiopian. It makes sense, then, that Ethiopia is Africa’s second most populous country. It also happens to be one of the fastest-growing economies, not just in Africa but in the world.
The biggest contributor to Ethiopia’s economic growth is the agricultural industry. This accounts for 41% of the GDP, 80% of the total exports and 80% of employment. More specifically, it’s coffee farming that’s the biggest bread winner in Ethiopia, as the biggest export for the country.
Economic growth in Ethiopia has decreased slightly in the last few years but is still impressive in international terms. 2013 saw a growth of 6.6% in terms of GDP – compared to 12.7% in 2010 – but the growth is still stable so Ethiopia could be another one to watch for climbing this list in the future.
6 Angola GDP (PPP): $123.1 billion
Angola is another one of Africa’s agricultural countries. Subsistence agriculture provides employment for 85% of the Angolan population. Oil production is another Angolan lifeline economically, providing 45% of the country’s GDP (though this pales in comparison to Libya’s 80%). Petroleum, diamonds and iron are the country’s biggest natural resources. Petroleum is a substantial source of investment for Angola, with the US importing 7% of its total petroleum imports from there.
Diamonds are another massive source of wealth for Angola, the country being Africa’s third largest producer of the precious stone – yet to date they’ve only explored 40% of the country’s potential diamond mining areas! The possibilities are endless!
5 Morocco GDP (PPP): $168.9 billion
Much like Tunisia, Morocco experienced a tourism boost in the early 21st century. Being a coastal country, Morocco attracts beach and sea lovers but it also happens to be the home of Casablanca, the city made famous in the 1942 film of the same name, which is sure to attract tourists. Morocco is another country of Africa’s that has experienced privatisation of many sectors that used to be in state control, which has expanded the economy since the 1990s.
One of the things keeping Morocco’s economy in the low figures is the high cost of importing goods, which is essential to the national economy. However, the economy is pretty impressive in African terms, bringing up the rear of our top five. In fact, the IMF described Morocco as “a pillar of development” in the area in 2010; there’s no higher praise!
4 Algeria GDP (PPP): $272.5 billion
Though its nearest neighbours are the tourism hotspots of Tunisia and Morocco, tourism in Algeria contributes just 1% of its total GDP. The largest employment sector is, in fact, the government. This sector employs 32% of the working Algerian public. Despite this, annual growth remains pretty good, at roughly 2% per year and an expected growth of 4% this year.
The main source of the economic growth in Algeria is its oil and gas sectors, which contributed a total of 70% to the country’s total revenue to date. These sectors also make up 97% of the country’s exports – the Algerians know how to maximise their natural resources.
3 Nigeria GDP (PPP): $444.3 billion
While it’s pipped to the top of our list here, Nigeria sits proudly on top of Africa’s agricultural output list. It comes as a surprise, therefore, that agriculture makes up less than a third of the total GDP. Though this is a major component of Nigeria’s economic DNA, agriculture is not the biggest breadwinner in the country. As for many countries in our top ten, it’s the oil industry that drives the country’s economy.
Nigeria provides about 10% of the oil imports in the US which makes this fossil fuel vital to sustaining their economic growth. CEO of the country’s main bank, Zenith, Godwin Emefiele has predicted that Nigeria will overtake Africa’s number one economy in the coming years, so this is one to watch.
2 Egypt GDP (PPP): $534.1 billion
This will undoubtedly be one of the better-known countries on our list. Egypt equals pyramids, the Sphinx and the Nile. Unfortunately, the political instability in Egypt during the last few years has affected the tourism industry negatively. Tourism once accounted for about 10% of Egypt’s $576 billion economy but the country has dropped by over 10 places on the list of best tourist countries in the world between 2011 and 2013 according to the WEF.
Agriculture is one of the country’s biggest resources, no doubt owing to the fact that the River Nile runs right through the country, providing an excellent source of irrigation. After 2% growth in Egypt’s GDP last year, it is expected to be back on the road to recovery with projected figures suggesting it will grow by 3.5% this year. Egypt will need to pick up the pace if they want to retain their number 2 spot; Nigeria is hot on their heels!
1 South Africa GDP (PPP): $576.1 billion
Here we are at last – the number one spot! Did you manage to guess it correctly? Yes, South Africa is sitting pretty at the top of the list. Mining of natural resources has been one of South Africa’s biggest economic drivers over the last few centuries. Fun side fact; look up the Big Hole to see an amazing hand-excavated diamond mine, not a major tourism attraction but definitely worth a look.
There’s a dark side to our number one spot: As with many of the wealthiest countries in Africa, South Africa has an enormous problem with wealth inequality. While it may be the richest country on the African continent, South Africa’s GINI index – measuring wealth inequality – is at over 63, on a scale where perfect equality is zero. In developed countries like Sweden and Denmark, the GINI index hovers in the low 20s. This highlights the fact that a relatively small number of people are benefiting from South Africa’s wealth.
The natural resources in South Africa include diamonds, coal, platinum and many other natural minerals. South Africans are the third-largest coal producers in the world, keeping the rest of us toasty on those chilly winter nights. Tourism is also a big deal in the country, accounting for over 10% of the total employment. In 2012, South Africa had 9.2 million international arrivals!