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. 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.
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.
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.
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.
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.
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.
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