GUEST POST - Sub-Saharan Africa, hit hard by COVID-19 and the accompanying slowdown in the global economy, saw its economy contract by around 2% in 2020, according to the World Bank.
The first contraction in 25 years was far less than rates of slowdown in the developed world though (the UK’s GDP dropped by almost 10% that same year), and Africa is set to grow by 2.1% in 2021 and 3% in 2022 – a strong footing.
The nations that make up Sub-Saharan Africa have long been associated with poverty, plague, and war, but this is very much not the case today, and the economies of these countries are playing a growing role in the global economy.
In this guide we explore which countries are fuelling Africa’s rise and why this is the case.
Which are the largest economies Sub-Saharan Africa?
In 2020, according to Statista, the top 10 countries in Sub-Saharan Africa were as follows:
- Nigeria - $442.98 billion
- South Africa - $282.59 billion
- Kenya – $101.05 billion
- Ethiopia - $95.59 billion
- Ghana - $67.34 billion
- Tanzania - $64.12 billion
- Angola – $62.72 billion
- Ivory Coast - $61.5 billion
- Democratic Republic of the Congo - $46.06
What is driving economic growth in Sub-Saharan Africa?
As we can see above, Nigeria, South Africa, Kenya and Ethiopia are the region’s most significant economies. Nigeria, built on oil wealth, has plenty of ties to the west and a large, young population. South Africa, while stagnating, is historically one of the most well-developed Sub-Saharan African nations.
Kenya has benefitted from decades of stability, as well as a diverse economy and plenty of high-value tourism. Lastly, Ethiopia is the second largest population in Africa after Nigeria, and has experienced explosive growth in the last few years, growing 8.4% in 2019 and 6.1% in 2020 during the pandemic.
It’s these examples that show us what is driving economic growth in the subcontinent. Oil and gas have delivered huge growth for nations like Nigeria, albeit at a steep environmental cost. The same is true for mining. Countries like South Africa that invested in diamond mining are now global leaders in diamond production, and countries like Gabon, South Africa, and Ghana are currently being approached by Chinese businesses looking for raw materials to fuel their own economic growth
Even trading, typically seen as a driver of prosperity in developed nations, is catching hold in Sub-Saharan Africa as internet usage spreads across the continent. Brokers such as Tickmill provide a forex account that offers a welcome bonus of $30 to African traders, and it’s these sorts of deals that are drawing in retail traders.
But for many countries in the region, it’s agriculture that remains the main driver, as is the case in Ethiopia. Providing for domestic consumption as well as surrounding countries, the lion’s share of the subcontinent’s workers have agricultural occupations.
Sub-Saharan Africa is growing faster than the developed world. Do you think the following decades will bring increased prosperity for the region? Let us know your thoughts in the comments section below.
