Africa is one of the largest continents in the world in terms of land mass but not in monetary wealth as most of the poorest countries in the world are found in Africa and the continent is regarded as the poorest. Not all African countries are poor; there are equally some wealthy countries in Africa but the number is far less than those of poor countries. The ranking of richest African countries is based on the Gross Domestic Product (Purchasing Power Parity) GDP (PPP) which gives the value of all the final goods and services produced within a country in any given specific year. A nation’s GDP at purchasing power parity (PPP) exchange rates is the sum value for all goods and services produced in the country in any given year assessed based on prevailing prices of the same products in the United States. This is the measure adopted by most economists when comparing living conditions or use of resources across countries. On the international scale and using the latest (2012) rankings stipulated by the International Monetary Funds (IMF) which which determined this year’s positions, 2 nations among the richest countries in Africa occupy the 25th and 26th positions. Below are the richest countries in Africa.
10 Richest African Countries
Ghana has recently joined the 10 richest countries in Africa and this feat is largely achieved through years of sound management, positively competitive business environment, and sustained reductions in poverty levels. Ghana’s economy is built on a diverse and rich resource base, not only relying on natural resources (Gold, cocoa, timber, bauxite and more recently, crude oil) which it has in abundance but on other sectors like services which accounts for 50% of GDP. This variation in sources of foreign exchange includes other sectors like agriculture which accounts for about a quarter of the country’s GDP and employs more than half of the labor force usually in the form of small landholders. Ghana is among the top 10 fastest growing economies in the world, the 10th richest country in Africa and the fastest growing economy in Africa with a most recent GDP growth of 8.7% and GDP (PPP) of $83.18 billion (2012 est.)
Libya is the 9th African richest country by GDP (PPP) standing at $87.91 billion. It largely depends on its oil reserve and petroleum products for most of its revenue and just about 20% of all of Libya’s GDP come from the service and construction sectors. The small number of population with a large amount of revenue from oil suggests the reason Libya has been described as an “Upper Middle Economy” by the world bank. Since 2000, Libya has recorded favorable growth rates with an estimated 10.6% growth of GDP in 2010 and 76.3% in 2012 after plummeting in 2011. The country is rapidly investing in other economic sectors like agriculture in order to diversify from the almost only source of foreign exchange.
Ethiopia is among the non-oil producing African countries with the fastest growing economies and has managed to sustain a high single digit annal growth rate since 2004 and is estimated to expand by 11.3 per cent in the 2012/13 budget year. Agriculture contributes to almost half of Ethiopia’s GDP and offers about 85% of all employments in the country. Ethiopia’s GDP stands at $103.1 billion as at 2012. The government has invested in ways to privatize and restructure her policies which is beginning to attract foreign investments in the country.
Tunisia is the seventh richest country in Africa. The Tunisian economy is diverse and market-oriented with significant foundation in mining, manufacturing and tourism. The latest 2012 figures for Tunisia’s GDP stands at $104.4 billion coming from a growth rate of 2.7%. Agriculture contributes 8.9% while industry and services contribute both 29.6% and 61.5% respectively. Due to government’s interference in a lot of sectors, there was stalled economic growth in the past 10 years but the country’s economic reform program in recent times has been lauded and appreciated as a model by international financial institutions and part of what the government has implemented include: liberalizing prices, reducing tariffs, lowering debt-service-to-exports and debt-to-GDP ratios, and extended the average maturity of its $10 billion foreign debt and as such, these structural adjustments brought in additional lending from the World Bank and other financial institutions. It is worthy of note that Tunisia is one of the top ranking African countries for economic competitiveness.
Angola is sixth among the richest countries in Africa with a GDP of $126.2 billion. The country is enjoys an extensive reserve of oil and gas resources, hydroelectric power, diamonds, and rich agricultural land but still remains has a fairly weak economy. Part of the reason is not far from poor management of resources and extreme corruption. According to Transparency International, Angola is rated Angola among the 10 most corrupt countries in Africa and 157 out of 174 countries rated. Being the second largest producer of crude oil in Africa following Nigeria, oil production contributes a very large percentage of foreign exchange and the lack of transparency in its management is responsible for the country’s poor economic performance nevertheless, it is still among the top 10 richest countries in Africa.
Morocco’s GDP (PPP) stands at $171 billion in using 2012 calculations making it the 5th among the richest countries in Africa. Morocco is largely dependent on agriculture and its proximity to the Europe is part of what what is influencing Morocco’s market and economy which it has capitalized on to build a diverse, open market-oriented economy. In a bid to boost exports and improve trade, in 2006, Morocco entered into a bilateral Free Trade Agreement with the United States of America and 2 years later, signed an advanced status agreement with the European union . Apart from phosphorus for which the country is the world’s third-largest producer, there are also revenues coming from tourism, textiles, apparel and overall, Morocco is the second richest non oil producing country in Africa after Egypt.
Located in the northern Africa is Algeria, the 4th largest economy among the wealthiest African countries with the most recent GDP figure standing at $274.5 billion. Algeria is a country where the government practically exerts a lot of control on most infrastructures. Recently, the government halted the privatization of most state-owned facilities and industries. Importation of goods and services were also restricted. Crude oil contributes the most revenues and foreign currency for Algeria accounting for some 60% of budget revenues, up to 30% of GDP, and more than 95% of export earnings.
Nigeria is the third among the richest countries of Africa with the most recent GDP figures standing at $450.5 billion. The 160-million people Nigerian market is seen as one of Africa’s largest market but this is more of a consumer market that practically buys more than it sells. Crude oil accounts for more than 85% of all foreign exchange and revenue generation by the giant country hence, is tied to fluctuations in the price of crude. Before the discovery of crude oil in the country, agriculture was contributing up to 90% of revenues before it was abandoned for oil. The government has not made strong effort to diversify the economy to some other sectors like services and industries. On a global scale, Nigeria is among the top 50th consumers for U.S goods but supplies significantly less amount outside oil.
Egypt has enjoyed quite a stable economy and continuous growth since the past quarter-century averaging 4%–5% however, the lack of transparency and freedom has not allowed growth to get to the expected levels. There is still no doubt that Egypt is among the richest countries in Africa with a well developed energy sector that is based on coal, oil, natural gas, and hydro power. During the most recent (2011) Egyptian revolution, the economy was brought to a near stand still and the Egyptian Government went back on some of the economic reforms it had earlier engaged in. At the time, there was significant political instability stalling the economic growth of the strongest Arab nation in Africa. Among the sectors that were most badly affected were tourism, manufacturing, and construction and the economy is foreseen to keep growing at a slow pace for the next several years.
1. South Africa
South Africa is the richest country in Africa and one of the fastest developing nation in the world. It is endowed with lots of natural resources including gold, diamond, platinum just to name a few. It is classified as a middle emerging market and unlike most other countries in Africa that depend on a single source for revenue, South Africa has a well structured and developed energy, financial, legal, transportation and communications sectors and the country’s stock exchange is rated the 18th Largest in the world. As of 2012, South Africa is the 25th richest country in the world in comparison with GDP (PPP) which stands at $578.6 billion. The country is the largest producer and consumer of energy in Africa and is also a popular destination for tourists, a sector that also generates a substantial amount of income. Among the amazing tourist attractions are the south African safaris and game reserves, diverse and picturesque culture.