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Economy of Africa
The economy of Africa consists of the trade, industry, agriculture, and human resources of the continent. As of 2019[update], approximately 1.3 billion people were living in 54 countries in Africa. Africa is a resource-rich continent. Recent growth has been due to growth in sales, commodities, services, and manufacturing. West Africa, East Africa, Central Africa and Southern Africa in particular, are expected to reach a combined GDP of $29 trillion by 2050.
In March 2013, Africa was identified as the world's poorest inhabited continent; however, the World Bank expects that most African countries will reach "middle income" status (defined as at least US$1,025 per person a year) by 2025 if current growth rates continue. There are a number of reasons for Africa's poor economy: historically, even though Africa had a number of empires trading with many parts of the world, many people lived in rural societies; in addition, European colonization and the later Cold War created political, economic and social instability.
However, as of 2013[update], Africa was the world's fastest-growing continent at 5.6% a year, and GDP is expected to rise by an average of over 6% a year between 2013 and 2023. In 2017, the African Development Bank reported Africa to be the world's second-fastest growing economy, and estimates that average growth will rebound to 3.4% in 2017, while growth increased to 4.2% in 2018. Growth has been present throughout the continent, with over one-third of African countries posting 6% or higher growth rates, and another 40% growing between 4% and 6% per year. Several international business observers have named Africa as the future economic growth engine of the world. The African Union's Agenda 2063 contains goals for furthering economic integration on the continent.
For millennia, Africa's economy has been diverse, driven by extensive trade routes that developed between cities and kingdoms. Some trade routes were overland, some involved navigating rivers, still others developed around port cities. Large African empires became wealthy due to their trade networks, for example Ancient Egypt, Nubia, Mali, Ashanti, the Oyo Empire and Ancient Carthage . Some parts of Africa had close trade relationships with Arab kingdoms, and by the time of the Ottoman Empire, Africans had begun converting to Islam in large numbers. This development, along with the economic potential in finding a trade route to the Indian Ocean, brought the Portuguese to sub-Saharan Africa as an imperial force. Colonial interests created new industries to feed European appetites for goods such as palm oil, rubber, cotton, precious metals, spices, cash crops other goods, and integrated especially the coastal areas with the Atlantic economy.
A significant factor on economic development was the gain of human capital by the elite. Between the 14th and 20th century, it can be observed that in regions with more elite violence and hence higher chances to die at a younger age the elite did not invest much in education. Therefore, their numeracy (as a measure of human capital) tends to be lower than in less safe countries and vice versa. This can explain the difference in economic development between the African regions.•
Following the independence of African countries during the 20th century, economic, political and social upheaval consumed much of the continent. An economic rebound among some countries has been evident in recent years, however.
The dawn of the African economic boom (which is in place since the 2000s) has been compared to the Chinese economic boom that had emerged in Asia since late 1970s. In 2013, Africa was home to seven of the world's fastest-growing economies.
As of 2018, Nigeria is the biggest economy in Africa by nominal GDP, followed by South Africa; in terms of PPP, Egypt is second biggest after Nigeria. Equatorial Guinea has Africa's highest GDP per capita. Oil-rich countries such as Algeria, Libya and Gabon, and mineral-rich Botswana have emerged among the top economies since the 21st century, while Zimbabwe and the Democratic Republic of Congo are potentially among the world's richest nations by natural resources, but have sunk into the list of the world's poorest nations due to pervasive political corruption, warfare, and emigration. Botswana stands out for its sustained strong and stable growth since independence.
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Economy of Africa
The economy of Africa consists of the trade, industry, agriculture, and human resources of the continent. As of 2019[update], approximately 1.3 billion people were living in 54 countries in Africa. Africa is a resource-rich continent. Recent growth has been due to growth in sales, commodities, services, and manufacturing. West Africa, East Africa, Central Africa and Southern Africa in particular, are expected to reach a combined GDP of $29 trillion by 2050.
In March 2013, Africa was identified as the world's poorest inhabited continent; however, the World Bank expects that most African countries will reach "middle income" status (defined as at least US$1,025 per person a year) by 2025 if current growth rates continue. There are a number of reasons for Africa's poor economy: historically, even though Africa had a number of empires trading with many parts of the world, many people lived in rural societies; in addition, European colonization and the later Cold War created political, economic and social instability.
However, as of 2013[update], Africa was the world's fastest-growing continent at 5.6% a year, and GDP is expected to rise by an average of over 6% a year between 2013 and 2023. In 2017, the African Development Bank reported Africa to be the world's second-fastest growing economy, and estimates that average growth will rebound to 3.4% in 2017, while growth increased to 4.2% in 2018. Growth has been present throughout the continent, with over one-third of African countries posting 6% or higher growth rates, and another 40% growing between 4% and 6% per year. Several international business observers have named Africa as the future economic growth engine of the world. The African Union's Agenda 2063 contains goals for furthering economic integration on the continent.
For millennia, Africa's economy has been diverse, driven by extensive trade routes that developed between cities and kingdoms. Some trade routes were overland, some involved navigating rivers, still others developed around port cities. Large African empires became wealthy due to their trade networks, for example Ancient Egypt, Nubia, Mali, Ashanti, the Oyo Empire and Ancient Carthage . Some parts of Africa had close trade relationships with Arab kingdoms, and by the time of the Ottoman Empire, Africans had begun converting to Islam in large numbers. This development, along with the economic potential in finding a trade route to the Indian Ocean, brought the Portuguese to sub-Saharan Africa as an imperial force. Colonial interests created new industries to feed European appetites for goods such as palm oil, rubber, cotton, precious metals, spices, cash crops other goods, and integrated especially the coastal areas with the Atlantic economy.
A significant factor on economic development was the gain of human capital by the elite. Between the 14th and 20th century, it can be observed that in regions with more elite violence and hence higher chances to die at a younger age the elite did not invest much in education. Therefore, their numeracy (as a measure of human capital) tends to be lower than in less safe countries and vice versa. This can explain the difference in economic development between the African regions.•
Following the independence of African countries during the 20th century, economic, political and social upheaval consumed much of the continent. An economic rebound among some countries has been evident in recent years, however.
The dawn of the African economic boom (which is in place since the 2000s) has been compared to the Chinese economic boom that had emerged in Asia since late 1970s. In 2013, Africa was home to seven of the world's fastest-growing economies.
As of 2018, Nigeria is the biggest economy in Africa by nominal GDP, followed by South Africa; in terms of PPP, Egypt is second biggest after Nigeria. Equatorial Guinea has Africa's highest GDP per capita. Oil-rich countries such as Algeria, Libya and Gabon, and mineral-rich Botswana have emerged among the top economies since the 21st century, while Zimbabwe and the Democratic Republic of Congo are potentially among the world's richest nations by natural resources, but have sunk into the list of the world's poorest nations due to pervasive political corruption, warfare, and emigration. Botswana stands out for its sustained strong and stable growth since independence.