When we think of Africa, we often think of different tribes living in cottages, but there are many developed countries like these most economically developed countries in Africa.
When talking about certain countries and their development, it is of enormous importance to discuss their economy in order to get to know the overall picture. In African case, this is even more important, because it will also help us to break the wrong picture of this amazing continent. The general issue regarding Africa was more discussed in our list of Most Civilized African Countries, and if you want to learn something more about it, we recommend you to check it as well. But now, let’s go back to the economy.
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In order to get the relevant data related to the economic development, the gross domestic product (GDP) is the most important indicator to look at. I have to admit that I did not know much about what GDP actually is, but Investopedia helped me a lot. In very simple words, this stands for the overall dollar value of everything that is produced in a certain period, and it is usually expressed in comparison to the previous period, making it easier to follow the potential development or possible decline. Later in the same article that explains what GDP actually is, there is also the explanation on how it is actually measured. Apparently, and if I may say, quite logically, this can be done only by economists, taking into consideration two aspects; what everyone earned in a year and what everyone spent. This is called income approach and expenditure method.
All in all, I don’t want to go deep into the issue of economic terms and facts, but I only want to focus on the case of Africa. This continent is considered to be very rich in resources, which would immediately imply its high development in normal conditions. However, due to certain historical, political and social circumstances, this is not always the case. Basically, it has everything in order to have a very progressive economic development, including oil, gas, and minerals.
In order to find out the most relevant data regarding the African countries, in this case, we made a classification according to the nominal GDP, using Knoema as our primary source with reference to International Monetary Fund (IMF).
So, let’s see what the most economically developed countries in Africa are.
10. Tanzania
Nominal GDP: $45.899 billion
This country has been through a lot in the past decade, paving its way to better development and poverty reduction, in order to establish the economy. It looks like everything that was done was pretty much effective since it has achieved growth and modernized in every sense. Although this is a very small country, the financial sector is now one of the best in Africa. It has been noted that the annual GDP growth has reached 7% thanks to transport, agriculture, manufacturing, construction, and communication. However, there are still some issues that Tanzania struggles with and that can affect the economic growth, such as corruption and weak rule of law.
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9. Kenya
Nominal GDP: $64.688 billion
As a member of East African Community, Kenya has a lot of advantages in terms of its economic development. Approximately, the average annual growth is around 5.9%, but the estimation of the World Bank is that it can actually reach 6.8%. Generally speaking, the most important aspects of the economic development are tourism, construction, agriculture and financial intermediation. However, Kenya still lacks some crucial things in order to stabilize its economy, and that are: stable government, political security, and even some threats by al-Shabaab terrorists from Somalia affected the development to some point.
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8. Ethiopia
Nominal GDP: $67.435 billion
Although Kenya was the leader among East African countries regarding the economy, Ethiopi that ranks 8th on our list of most economically developed countries in Africa actually has excellent prospects to overthrow it and become the leader. It has been estimated that the annual growth in the recent decade was 10.8%, which was a little bit interrupted by the fall of the agricultural sector, which was affected by the horrible drought. At the same time, the anti-government protests took place, but Ethiopia still struggles to keep the place of a successfully developing country. The fact is also that Ethiopia is quite a populous country, being very attractive for its cheap labor. It also struggles to establish an effective rule of law, with the focus on the legislation regarding the property rights, and it is still one of the countries where corruption is highly present.
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7. Angola
Nominal GDP: $81.497 billion
This country has all of the prospects to become Africa’s biggest oil producer, being one of the main reasons why its economy is developing so fast. However, even though the growth in the previous decade was estimated to be around 7%, it has reached only 5.1%. One of the reasons for that is the fact that its currency, the kwanza weakened, eventually bringing to inflation, followed by certain internal and external issues, including the instability of the government. Generally speaking, besides the oil production, some of the other aspects that contribute to economic development include non-oil energy, agriculture, manufacturing, fisheries, and construction.
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6. Sudan
Nominal GDP: $93.729 billion
When it comes to Sudan, certain segments are highly developed, thus positively affecting its economic development, while on the other side there are still some obstacles and horrible structural issues that need to be resolved as soon as possible. The most important aspect is definitely the petroleum sector since it is responsible for the economic stability and foreign exchange. On the other side, foreign investors hesitate a lot to invest in Sudan, due to continuous conflicts with rebels. There is also the issue of the unstable government, corruption, and weak legal system. The annual growth measured in 2013 was 3.6%, and besides the petroleum, mining and agriculture are also very important in this regard, being the reason why the country is on the list of most economically developed countries in Africa.
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5. Morocco
Nominal GDP: $108.096 billion
Morocco, the next one on the list of most economically developed countries in Africa is a very specific case in Africa, and can even compete with some of the developed countries in the world regarding the renewable energy. It has been estimated that the use of the renewable energy has reached 40%, primarily solar and wind, being completely opposite of the fact that it was one of the biggest Middle East’s energy importers several years ago. This largely contributes to the economic development, besides the vibrant agricultural sector. The country has prospects to increase the annual economic growth if we take into consideration that its government announced a historic decision last month to build a gas pipeline to connect Morocco and Nigeria, which will eventually pave the way up to Europe.
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4. Algeria
Nominal GDP: 165.974 billion
We are continuing our list of most economically developed countries in Africa with Algeria that is the biggest country in Africa and Mediterranean. The annual economic growth in 2015 was 3.9%, which is slightly larger than the economic growth back in 2014 when it was 3.8%. The most important aspects that affect the economic growth in Algeria are mostly agriculture, with the focus on vegetable production, but also very developed oil and gas activity. However, there are still some things that affect the economy of Algeria negatively, and among them, the most noticeable are the decrease in oil prices and unemployment, but also the currency decrease, since the dinar lost its value for around 20 percent over the last several years.
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3. South Africa
Nominal GDP: 266.213 billion
South Africa without any doubt deserves to be highly ranked when it comes to most economically developed countries in Africa, and reasons for that are numerous. The most important aspects are definitely well-functioning institutions which strive to protect intellectual and private property, with a largely developed legal framework and highly developed private institutions. The annual GDP growth rate is 1.3%, but the biggest problem actually is the decline in the global economy, which affects South Africa quite negatively. On the other side, the unemployment is still the biggest issue, but overall, this country has great prospects to become the leading country in Africa.
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2. Egypt
Nominal GDP: 330.765 billion
The second place on the list of most economically developed countries in Africa goes to the country that went through many turbulences, especially after 2013 and disturbing political riots, including the ouster of the president Mohamed Mursi in July of the same year. However, transcontinental Egypt still has a lot to offer, and you can imagine that tourism is one of the most important aspects that contribute to its economic development. Besides the tourism, services, agriculture, and industry also contribute a lot, and the annual GDP growth is around 2%. The largest growth was visible during the period of January-March this year when the foreign investments increased and external sector came to focus again.
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1. Nigeria
Nominal GDP: 537.966 billion
Although many things severely affected the Nigerian economy, this most populous country in Africa still struggles to keep the first place. Not only the low petroleum prices but also attacks by the militants in the oil-producing region lead to the stagnation of its economy at one point. However, it has been estimated that from 1990 to 2010, the economy increased by 89%, which is a great result and basically raising from the ashes. The GDP growth for 2016 is estimated at 1.5%, with the expectation to increase in 2017. Nevertheless, this country is without any doubt the first among most economically developed countries in Africa.
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