12 fastest growing economies in Africa
Africa's economy started recovering in 2021 following the disastrous consequences of the COVID-19 pandemic. Its gross domestic output increased significantly in 2021 by an estimated 6.9%.
The anticipated real GDP growth for Africa in 2021 was higher than both the global average and other regions' growth rates. Four of Africa's top six countries had an increase in their Purchasing Managers' Index (PMI) readings, indicating an improvement in economic activity.
Egypt, Kenya, Nigeria, and South Africa's PMI values in 2021 (which collectively accounted for 52% of Africa's GDP in 2021) were usually over the 50-point threshold and closer to pre-pandemic levels. This comes after the continent saw a 1.6% shrinkage brought on by the pandemic in 2020.
North Africa (11.7%) and East Africa (4.8%) had the fastest growth. The increase was ascribed to the recovery in oil prices and global demand as well as the uptick in household spending and investment in the majority of nations following the easing of restrictions.
Overall, macroeconomic fundamentals have improved, but there are still many challenges to face in the near future. The global macroeconomic headwinds and instability caused by the war between Russia and Ukraine may cause growth to slow to 4.1% in 2022 and stagnate there in 2023. The PMI rating for four of Africa's six major economies decreased in March 2022 due the start of the Russia-Ukraine war in February 2022.
IMF African Department Director Abebe Aemro Selassie thinks that the effects of the Ukraine war — primarily an increase in gasoline and food prices — would be felt by everyone. According to the World Bank, the combined consequences of the Ukraine war, massive debts, and climate change have hampered Africa's economic progress.
African countries have tremendous economic potential with rewarding opportunities for investors. Therefore, despite so many obstacles, a number of African countries have been able to expand their economies, which was primarily made possible by advances in underlying infrastructure that accelerated the convergence of underdeveloped regions with national levels.
Other countries have profited from rising oil prices. For all of the countries on our 12 Fastest Growing Economies in Africa list, each is growing faster than 5% in terms of GDP growth as of 2021.
Major global mining companies like Newmont Corporation (NYSE:NEM), Barrick Gold Corporation (NYSE:GOLD), and Freeport-McMoRan, Inc. are also investing heavily in Africa. Technology startups are also sprouting all over the continent, with huge investments from companies like Google, Apple and Amazon.
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