Economic conditions across the world are quite similar at the moment with global inflation and higher interest rates affecting economies. A good economy is a mix of ingredients such as low inflation, stable economic growth, a strong business environment, a well balanced financial sector, a sound fiscal policy and monetary policy, and political stability, among the top elements. In the modern-day economy, a technology-driven economy is a key aspect of growth. Innovation and implementation of technological advancements across different sectors help boost an economy.
Africa has immense potential but most of the countries in the region have suffered extreme poverty and humanitarian crises. On May 23, the United Nations Population Fund mentioned that almost 43 million people require humanitarian aid across Ethiopia, Kenya, and Somalia in 2023, while 32 million people are acutely food insecure among them. Extreme poverty in African countries has had devasting effects over the years and the major reason for this has been economic and political instability. However, some African countries are making definite progress in reviving their economies. As we mentioned earlier, the current GDP of Sub-Saharan Africa is almost $2.05 trillion, as per the World Bank. At the moment, we have nine economies in Africa that have a GDP greater than $100 billion.
Africa has a complex economy considering the potential and obscure successes in different countries across the region. Africa has the world’s youngest and fastest-growing population, which creates innumerable opportunities for states to benefit from human capital in the continent. According to the United Nations, Africa is home to the youngest population with 70% of Sub-Saharan countries having a major chunk of their population of under the age of 30. Nigeria, Africa’s biggest economy, has the third youngest population in the world. On June 5, McKinsey shared a report on the economic progress of Africa in which it shared that Africa’s population is expected to more than double to 2.5 billion people by 2050. As per the World Bank, the total population of Sub-Saharan Africa was recorded at around 1.21 billion in 2022. With rich natural resources and myriad human potential, Africa holds such a strong resource that can uplift not only the continent but the entire world.
As per McKinsey, half of the African individuals reside in countries where GDP growth, between 2010 and 2019, has surpassed the average growth rate of 4.2% in the continent since 2000. Most of these countries fall under the category of “consistent growers” and “recent accelerators.” Among these countries, midsize economies have taken advantage of higher-than-average urbanization, investments, and exports. Between 2010 and 2019, 13 African countries have had above-average GDP growth rates including Ethiopia, Rwanda, Ghana, Tanzania, and the Democratic Republic of Congo, among others. In 2023, as per the IMF data of annual GDP growth rate, Ethiopia, Rwanda, Tanzania, and the Democratic Republic of Congo have a GDP growth rate of 6.1%, 6.2%, 5.2%, and 6.3%, respectively.
On the other side, African heavyweights including Nigeria, South Africa, and Egypt are expected to remain in slow-growth mode, considering challenging domestic and external economic pressures. According to EIU’s 2023 economic outlook for Africa, countries including South Africa, Egypt, and Nigeria are expected to record GDP growth of 1.5%, 3%, and 3.1% in 2023, respectively. South Africa is facing higher interest rates, weak demand for its export businesses, and power supply issues. Nigeria is also facing similar issues, but it will benefit from a resilient commodities trade and dynamic consumer goods market in larger cities.
As per EIU, the North Africa and Sub-Saharan Africa is projected to grow by 3.2% in 2023. All the African economies will continue to grow, even though the real GDP growth rates will vary across the continent. A key aspect of the regional growth will be the involvement of superpowers across Africa including the U.S., China, and Russia. For instance, Russian President, Vladimir Putin, recently wrote off debt of more than $20 billion to the African countries. On July 28, Reuters reported that Putin, during the two-day summit in St. Petersburg, said, “Russia’s attention to Africa is steadily growing.”
In 2023, African economies will face turbulent phases due to various internal and external shocks. Weather remains a key threat to the continent as we have recently witnessed two catastrophic events across the region, a devasting earthquake in Morocco and floods in Libya. Overall, Africa is a continent full of diverse opportunities and dynamic markets with huge potential. While the large-sized economies continue to recover from the economic rifts, the growth of midsize economies will be a key contributor to the development of the region as we move forward in these challenging times.
Pixabay/Public Domain
Our Methodology
For our list of countries with the best economy in Africa, we sourced the data from the IMF’s database which tracks GDP at current prices. We narrowed down our selection to 15 African countries with the highest GDP and ranked them in ascending order of this metric.
GDP is the fundamental metric to assess a country’s overall economic condition. Therefore, we have gone with the total GDP of a country to assess its economic strength. We have also reported the annual GDP growth of all the countries in the lists to highlight their present growth in the continent. The data for the GDP growth is taken from the IMF’s Real GDP growth database.
Without further ado, let’s take a look at the 15 countries that have the best economy in Africa.
15 Countries That Have the Best Economy in Africa
15. Libya
Total GDP of the country (2023): $46.30 Billion
Libya is located around the Mediterranean Sea to the north and Chad to the south. Libya shares its borders with two of the biggest economies in the region, Egypt and Algeria. Libya’s economy is mainly dependent upon the oil and gas sector, which represents more than half of the GDP of the country. In 2023, Libya records a stunning annual GDP growth rate of 17.5% and makes it to our list of countries that have the best economy in Africa.
14. Cameroon
Total GDP of the country (2023): $48.63 Billion
Cameroon is an important Central African country, located in the premises of the Gulf of Guinea. Cameroon is a lower-middle-income country whose economy mainly revolves around its natural resources including mineral resources, oil and gas, and agricultural goods. In 2023, Cameroon has an annual GDP growth rate of 4.3% so far. Ranked 14th on our list, Cameroon ranks among the countries that have the best economy in Africa.
13. Uganda
Total GDP of the country (2023): $49.79 Billion
Uganda is situated in the East African region and it has a diverse landscape with snow-capped Rwenzori Mountains and Lake Victoria. Uganda’s economy is based on agriculture, industry, and services sectors which have a proportion of 24.2%, 25.5%, and 50.3%, respectively. After suffering from economic shocks in 2022, Uganda’s economy is recovering with an annual GDP growth rate of 5.7% in 2023. Uganda makes it to our list of the countries that have the best economy in Africa.
12. Tunisia
Total GDP of the country (2023): $49.82 Billion
Located in the northern part of Africa, Tunisia has a population of 12.3 million. Tunisia recently went through a political transition by adopting a new constitution. In July 2022, Tunisia introduced a presidential system of government and a bicameral legislative system. In 2023, the African country records an annual GDP growth rate of 1.3%. Tunisia makes it to the 12th place on our list of the countries that have the best economy in Africa.
11. Ghana
Total GDP of the country (2023): $66.62 Billion
Ghana is located in the western part of Africa. The country has been suffering from macroeconomic challenges. The World Bank projects Ghana’s economy to recover by 2025. In 2023, the country records an annual GDP growth of 1.6%, which is around its projected growth this year. Ghana makes it to our list of the countries that have the best economy in Africa.
10. Democratic Republic of the Congo
Total GDP of the country (2023): $69.47 Billion
The largest country in Sub-Saharan Africa, the Democratic Republic of Congo is the same size as Western Europe. The country has a population of 99 million. In 2023, the Democratic Republic of Congo has an annual GDP growth rate of 6.3% and makes it to our list of the countries that have the best economy in Africa.
9. Tanzania
Total GDP of the country (2023): $85.42 Billion
Tanzania is famous for its wildlife and it has some of the biggest wild animals including elephants, rhinos, buffalos, lions, and leopards. Tanzania is one of the fastest growing economies in the world. The Tanzanian economy is largely based on agriculture as it is a middle-income country. So far in 2023, the country has recorded an annual GDP growth rate of 5.2%. Tanzania ranks ninth on our list of the countries that have the best economy in Africa.
8. Angola
Total GDP of the country (2023): $117.88 Billion
Angola is located in the southern part of Africa and has a population of 25.5 million. The country covers a vast landscape including rivers, tropical Atlantic beaches, and the Sub-Saharan desert. Over the past five years, Angola’s economy has improved due to better macroeconomic management and public sector governance. With an annual GDP growth rate of 3.5% in 2023, Angola ranks among the countries that have the best economy in Africa.
7. Kenya
Total GDP of the country (2023): $118.13 Billion
Kenya is one of the biggest economies in Africa and its annual GDP growth rate is 5.3% in 2023. The East Africa country continues to be one of the fastest growing economies in the world in 2023. Kenya’s economic progress is powered by the development of public infrastructure projects, public and private sector investment, and strong fiscal policies. Placed seventh on our list, Kenya ranks among the countries that have the best economy in Africa.
6. Morocco
Total GDP of the country (2023): $138.78 Billion
Morocco shares its borders with the Atlantic Ocean and the Mediterranean Sea. A country with diverse cultures including Arabs, Berbers, and Europeans, Morocco has huge potential and is improving its economy with new innovative developments. In 2023, Morocco records an annual GDP growth rate of 3% and ranks on our list of the countries that have the best economy in Africa.
It is to be noted that Morocco’s recent earthquake has cost a huge economic dent. However, the government is taking measures to control the economic and infrastructural damages. On September 20, Reuters reported that the Moroccan government had created a five-year reconstruction plan to spend over $11.7 billion to overcome this catastrophe.
5. Ethiopia
Total GDP of the country (2023): $159.08 Billion
Ethiopia ranks among the countries that have the best economy in Africa. After the end of the civil war on November 2, 2022, the economy is back on track. Agriculture continues to play a vital role in the country’s economy, adding up to 40% to GDP. In 2023, Ethiopia has recorded an annual GDP growth rate of 6.1% so far, which makes it one of the fastest growing economies in the region.
4. Algeria
Total GDP of the country (2023): $206.01 Billion
Algeria has been ruled by the Romans and Ottomans. Hydrocarbon production and export revenues play a key role in the country’s economy. Algeria is placed fourth on our list of the countries that have the best economy in Africa.
Hedge Fund Resource Center