In this article, we take a look at the 25 least developed countries in Africa. You can skip our detailed analysis of African development and go directly to the 10 Least Developed Countries in Africa.
Africa is the fastest economically-developing region in the world. Countries like Rwanda and Ethiopia grew with an average rate of 7.5% over the past 20 years. However, factors like corruption, political instability and violence have been holding back much of the economic progress on the continent in general.
Other two important factors that have played a role in hampering development in Africa are poor infrastructure and heavy reliance of many of its countries on agriculture, with 70% of the African workforce employed in agricultural sectors. In this regard, African economies are also some of the most climate-vulnerable in the world.
Further, many African countries have failed to industrialize and industrial output on the continent has actually seen a decline. According to the Economist Intelligence Unit, Africa made up 3% of the global manufacturing in the 70s, but the continent’s output had reduced by around 1.5% by 2016. Regardless, many countries and corporations are engaged in developing the continent.
Which Countries Are Investing in Africa?
China has been increasing its foothold on the continent, while at the same time, the US has been decreasing its investments in Africa. Chinese investment in Africa grew by 44% from 2014 to 2018, with $46 billion invested in 2018, while that of the US decreased by 30% during the same period.
China has been heavily investing into three countries — Nigeria, South Africa and Democratic Republic of Congo. These three countries received 40.3% of the Chinese investments during the four-year period, with Nigeria receiving the lion’s share of the three countries, at $14.2 billion.
Corporate Investments in Africa
Several corporations have also been paying attention to the continent, with US companies having invested $48 billion in Africa, according to the Borgen Project. Some of the prominent US companies focusing on Africa include Alphabet Inc. (NASDAQ:GOOG), Ford Motor Company (NYSE:F) and Cummins Inc. (NYSE:CMI).
The Alphabet Inc. (NASDAQ:GOOG)’s ‘Google Africa’ has a number of projects in Africa, including the expansion of The Alphabet Inc. (NASDAQ:GOOG)’s own network, installation of Google Fiber, and investments in renewable energy.
Cummins Inc. (NYSE:CMI) has also been focused on development in Africa, while making a buck. In this regard, Cummins Inc. (NYSE:CMI) is establishing its local branches in many African countries to share profits with the local community.
Finally, Ford Motor Company (NYSE:F) is working with several organizations like World Vision in Africa and Riders for Health to improve access to quality education and healthcare on the continent. Ford Motor Company (NYSE:F) also opened up a production plant in Nigeria in 2017.
Chinese companies have also been investing in Africa. However, as of late, they’ve been investing more in West Africa, moving away from the traditional North African markets.
Let’s now move on to the 25 least developed countries in Africa.
MickyWiswedel / Shutterstock.com
Our Methodology
For our list, we’ve defined ‘least developed countries in Africa’ as ones with low human development and GDP per Capita. In this regard, we’ve selected African countries from the Human Development Index (HDI) of 2021-22 with the lowest scores. We then took into account their GDPs per Capita and then assigned each country two rankings based on their HDI scores and GDPs per Capita.
We’ve ranked these countries based on the average of the two rankings and listed them in a descending order of low development. For countries with the same averaged-out values, we’ve used their rankings in GDP per Capita as the tiebreaker.
Note: The data on human development in Somalia is lacking, due to widespread destruction and conflict. Therefore, we have used Somalia’s ranking (in descending order of poor infrastructure) among African countries on the Logistics Performance Index as a substitute for human development, since human development and infrastructure development are interrelated.
25. Togo
HDI Ranking: 28
GDP Per Capita Ranking: 21
Average Ranking: 24.5
Togo is a West African country with a GDP per Capita of $973 as of 2021. Togo is caught in a cycle of poverty, due to corruption, economic mismanagement and informality in the economy. The two biggest factors holding Togo back are the poor infrastructure and water insecurity, with 37% of the population having no access to clean water.
24. Senegal
HDI Ranking: 21
GDP Per Capita Ranking: 27
Average Ranking: 24
Senegal is another West African nation on the list of the least developed countries in Africa. It has a GDP per Capita of $1,637 as of 2021. It has one of the poorest infrastructures in the world, ranking in 141st position out of 167 countries on the Aggregate Logistics Performance Index.
23. Lesotho
HDI Ranking: 23
GDP Per Capita Ranking: 23
Average Ranking: 23
Lesotho is one of the most underdeveloped African countries, with rampant corruption, inequality and a poor infrastructure.
22. Uganda
HDI Ranking: 24
GDP Per Capita Ranking: 18
Average Ranking: 21
Uganda is an East African country with a GDP per Capita of $884 as of 2021. The economy largely relies on agriculture.
According to 2018 figures from the World Bank, agriculture employs 70% of the country’s population, making up half of Uganda’s income from exports and a quarter of its GDP. This reliance on agriculture has left Uganda as one of the least developed countries in Africa.
21. Rwanda
HDI Ranking: 26
GDP Per Capita Ranking: 16
Average Ranking: 21
Rwanda is located in Central Africa, and has a GDP per Capita of $822 as of 2021. Rwanda’s economy is largely based on subsistence agriculture and the country was devastated in the 90s war. Rwanda’s population has grown rapidly and there’s a scarcity of arable land in the country. These factors, combined with corruption, income inequality and lack of access to quality education and healthcare, has kept Rwanda underdeveloped.
20. Ethiopia
HDI Ranking: 16
GDP Per Capita Ranking: 20
Average Ranking: 18
Ethiopia has a GDP per Capita of $925 as of 2021. The country is underdeveloped for several reasons like an agriculture-based economy with limited diversification, poor infrastructure, limited access to education, and corruption. Ethiopia lacks the infrastructure for a thriving modern economy, and ranks 131st out of 167 countries on the aggregate Logistics Performance Index.
19. Guinea
HDI Ranking: 10
GDP Per Capita Ranking: 25
Average Ranking: 17.5
Guinea is underdeveloped because of corruption, lack of economic diversification, political instability and poor infrastructure. Corruption is particularly a huge problem in the country, with Guinea ranking in 150th position out of 180 countries on the Corruption Perception Index (CPI) of 2021.
18. Sudan
HDI Ranking: 19
GDP Per Capita Ranking: 13
Average Ranking: 16
Sudan is one of the least developed countries in Africa, with a GDP per Capita of $752 as of 2021. The country is underdeveloped due to corruption, political instability, and economic dependence on oil. It has had a history of military coups and civil war, and corruption is endemic in Sudan, with the country ranking 164th out of 180 countries on 2021 CPI. These factors have greatly undermined its economic prospects.
17. Gambia
HDI Ranking: 17
GDP Per Capita Ranking: 14
Average Ranking: 15.5
Gambia has poor infrastructure, with the country ranking 138th out of 167 countries on the aggregate Logistics Performance Index. Moreover, political instability, including military coups, has disrupted economic prosperity in the country.
16. Malawi
HDI Ranking: 22
GDP Per Capita Ranking: 9
Average Ranking: 15.5
Malawi is underdeveloped due to an agriculture-based economy that is not diversified enough due to poor infrastructure and lack of foreign investment. Other factors include corruption, political instability and limited access to facilities like education, healthcare and clean water.
15. Guinea-Bissau
HDI Ranking: 14
GDP Per Capita Ranking: 15
Average Ranking: 14.5
Guinea-Bissau has a GDP per Capita of $795 as of 2021, making it one of the least developed African countries. Several factors like corruption, economic reliance on agriculture and political instability have stunted the country’s economic potential.
14. Burkina Faso
HDI Ranking: 9
GDP Per Capita Ranking: 19
Average Ranking: 14
Burkina Faso is a landlocked country located in West Africa. The country largely lags behind in development due to civil strife, violence and political instability. Due to these factors, Burkina Faso is also one of the most dangerous countries in the world.
13. Eritrea
HDI Ranking: 15
GDP Per Capita Ranking: 10
Average Ranking: 12.5
Eritrea has a GDP per Capita of $644 as of 2021. Apart from the common factors of African countries’ low development, Eritrea has also been subject to economic sanctions by the UN and Western countries like the US. Moreover, one-third of Eritrea’s economy is based on rain-fed agriculture and 20% on mining, making it highly vulnerable to weather patterns and demand shocks.
12. Mali
HDI Ranking: 7
GDP Per Capita Ranking: 17
Average Ranking: 12.5
Mali has a GDP per Capita of $874 as of 2021. The factors responsible for Mali’s underdevelopment are the same as other African countries — poor infrastructure, political and civil unrest and an agriculture-based economy.
11. Liberia
HDI Ranking: 13
GDP Per Capita Ranking: 11
Average Ranking: 12
Liberia is located in West Africa, and has a GDP per Capita of $676 as of 2021. Liberia’s economy is heavily dependent on natural resource extraction, which leaves it vulnerable to demand shocks. In addition, nearly half of the Liberian economy is informal.
Click to continue reading and see the 10 Least Developed Countries in Africa.
Suggested Articles:
- 25 Least Developed Countries in Asia
- 25 Richest Countries in Africa
- 25 Most Developed Countries in the World
Disclosure: none. 25 Least Developed Countries in Africa is originally published on Insider Monkey.
Hedge Fund Resource Center