By The African Exponent
China’s massive growth has been one of the greatest stories over the past several decades. But the Chinese economy certainly isn’t the only one posting huge growth rates.
Africa is on the move and according to MCKinsey 7 Company’s report, ‘Lions on the Move: The Progress and Potential of African Economies’, Africa’s combined Gross Domestic Product will be $2.6 trillion by 2020. The report further says that “Africa’s consumer spending by 128 million households with discretionary income is expected to be around $1.4 trillion.”
According to the Economist Corporate Network (ECN), the past twenty years, the center of the global economy has been shifting from the developed to the developing world. Today, growth rates in developing economies are many times higher than in developed economies. Sub-Saharan Africa, in particular, is one notable case in point. In 2015 Sub-Saharan Africa’s GDP is expected to grow at 4.5%, making it the fastest-growing economic zone in the world, outpacing Asia’s regional average of 4.3% annual growth.
Africa is world’s greatest sources of raw materials used in different parts of the world. That alone puts Africa at the forefront in terms of growth prospects in future. This however, depends on various variants like technological advancement, bureaucracy, corruption, skills shortages and personal safety and regulatory environment.
Based on the forecasts from the World Bank’s Global Economic Prospects, we have compiled a list of 6 countries with the highest projected compounded annual growth rate (CAGR) from 2014 through 2017 based on the forecasts from the
These countries are certainly not the most developed ones, but their economic progress is praiseworthy.
6. Rwanda
Rwanda’s Gross Domestic Product (GDP) increased from 4.7% in 2013 to 7.0% in 2014. This year, Rwanda’s GDP is expected to rise to 7.5%. This positive outlook comes 20 years after Rwandan Genocide which paralyzed the country’s economy. Over the years, the East African country has become a success story with unity and reconciliation forming part of reason for its fast growth.
Rwanda is doing everything possible to reduce bottlenecks in transport, and energy infrastructure to bolster economic growth.
Moreover, tourism sector and remittances have continued to remain strong foreign exchange earners. This is according to African Economic Outlook 2015 report for Rwanda.
The report continues to argue that “Improved weather conditions and sustained investments in agriculture are expected to drive further growth in the agriculture sector”. Agriculture sector remains the leading source of revenue for the developing economy.
Moreover, the just released World Bank’s annual “Doing Business 2016” puts Rwanda as 2nd easiest country in Africa to do business in Sub-Saharan Africa and first in Eastern Africa.
Doing Business say that getting access to credit in Rwanda is not comparable to any other economy in Africa as it comes as second best in the world after Georgia.
In summary, here is Rwanda’s GDP outlook:
2015 GDP: +7.00%
2016 GDP: +7.00%
2017 GDP: +7.50%
2014-2017 GDP CAGR: +7.12%
Economy: 90% of the population works in subsistence agriculture, while tourism, minerals, coffee, and tea round out Rwanda’s economy. Though the country has taken significant steps forward since the 1994 genocide, 45% of the population still lives below the poverty line.
Source: World Bank, CIA World Factbook
5. Tanzania
As of 2014, Tanzania had an estimated population of 47.4 million. International Monetary Fund and World Bank Group (WBG) among other development partners have supported the East African nation to make important economic and structural reforms and sustain its economic growth rates.
Despite looming poverty in the country, the new political leader, President John Magufuli is a promising change to the country. He is already in the process of minimizing the country’s overspending by cutting cost of unnecessary government spending.
According to WBG, by 2014 the gross domestic product of the country stood at 7.0% with the main contributors being; trade, construction, agriculture and transport sectors.
Here is a look into the country’s GDP:
2015 GDP: +7.20%
2016 GDP: +7.10%
2017 GDP: +7.10%
2014-2017 GDP CAGR: +7.15%
Economy: Tanzania has recently seen high growth rates because of gold production and tourism. The economy also runs on telecommunications, banking, energy, and mining, as well as agriculture. In terms of per capita income, however, the country is one of the poorest in the world.
Source: World Bank, CIA World Factbook
4. Mozambique
Coal production has contributed to the steady growth of Mozambique. Moreover, there have been large infrastructure projects as well as credit expansion driving the economy, African Economic Outlook says.
The World Bank further argues that the country’s emerging extractive industry could be the driving force for Mozambique to become a middle-income country by 2025.
African Economic Outlook shows that Mozambique’s GDP is growing by 8.1% since last year.
Relative peace in the country after many years of civil war and the discovery of natural gas are promising factors for the growth of the economy in the past and in future, if the status quo remains.
Here is a summary of the country’s GDP:
2015 GDP: +7.20%
2016 GDP: +7.30%
2017 GDP: +7.30%
2014-2017 GDP CAGR: +7.30%
Economy: Mozambique has attracted large investment projects in natural resources, which means the country’s high growth rates should continue. Some analysts believe that Mozambique might be able to generate revenues from natural gas, coal, and hydroelectric capacity greater than its donor assistance within five years.
But the vast majority of the country works in subsistence agriculture, and over half the population remains below the poverty line.
Source: World Bank, CIA World Factbook
3. Cote d’Ivoire
African Economic Outlook (AEO) indicates that the growth rate of Cote d’Ivoire will grow steadily this year following the estimated growth of 8.3% in 2014.
Last year, the government took important steps to reduce political tension as well as foster reconciliation and social cohesion.
By 2020, AEO estimates that the country will have achieved its goal to become an emerging nation.
With the help of IMF, the country has been able to collect more taxes and control government spending which has lowered the budget deficit including grants.
Here’s a summary of the country’s GDP:
2015 GDP: +8.00%
2016 GDP: +7.70%
2017 GDP: +7.50%
2014-2017 GDP CAGR: +7.80
Economy: About two-thirds of the population works in agriculture-related industries. The country is the world’s largest producer and exporter of cocoa beans and is also a major player in the coffee and palm-oil industries.
Source: World Bank, CIA World Factbook
2. Democratic Republic of the Congo
By 2014, Congo’s GDP doubled from 3.3 in 2013 to 6.0%. This was brought about by the rebound in oil production (60% of gross domestic product [GDP]) and the strong performances in the non-oil sector, supported by continued public investment, according to AEO.
In 2015, DRC registered its highest economic freedom score in the 2015 index.
IMF states that the “overall growth is projected to average about 3 percent per annum during 2015–20, as oil production is projected to peak in 2018 following the coming on stream of a new oil field. Non-oil growth is projected to slow to around 3 percent in 2015–16, as public investment spending contracts and mining projects are delayed due to the uncertain global outlook for iron ore”.
GDP summary for the country is as follows:
2015 GDP: +8.00%
2016 GDP: +8.50%
2017 GDP: +9.00%
2014-2017 GDP CAGR: +8.62%
Economy: The Democratic Republic of Congo has huge natural-resource wealth, which it hasn’t been able to efficiently monetize because of systemic corruption, conflict, and political instability. That said, its economy is slowly recovering since the tumultuous 1990s.
Source: World Bank, CIA World Factbook
1. Ethiopia
According to the Gates Foundation’s report dubbed “One foot on the ground, one foot in the air”, compiled by the Overseas Development Institute, the agriculture sector has enhanced the growth and development of Ethiopia. Specifically, the sector has helped cut poverty by 7% between 2005 and 2011, despite having the lowest human development in the 1990s.
To boost productivity, Ethiopia is “Maintaining teams of agronomists across vast rural areas to boost productivity by recommending best agricultural practices and scientific innovation,” the report continues.
“Further, a doubling of Ethiopia’s road network in two decades, has allowed more farmers to bring their produce to market,” said the report.
On average, Ethiopia’s economy is growing at 10% a year and it is expected to double within the next seven years. This means that by 2025, it will have grown to a middle-income nation. This is as reported by World Bank.
Ethiopia’s GDP in summary:
2015 GDP: +9.50%
2016 GDP: +10.50%
2017 GDP: +8.50%
2014-2017 GDP CAGR: +9.70%
Economy: Ethiopia’s economy is mostly agriculture-based, but the government has made a push to diversify into manufacturing, textiles, and energy generation. But while the country has seen and (per the World Bank) will continue to see high GDP growth, per capita income remains ones of the lowest in the world.