Top 6 Richest African Countries by Overall GDP in 2021

Africa, home to more than 1.3 billion people, half of whom will be under 25 years old by 2030, is a diverse continent offering human and natural resources that have the potential to yield inclusive growth and eradicate poverty in the region. With the world’s largest free trade area and a 1.2 billion-person market, the continent is creating an entirely new development path, harnessing the potential of its resources and people. The region is composed of low, lower-middle, upper-middle, and high-income countries. Africa’s 54 countries include some of the fastest-growing economies in the world. The African economy is expected to reach a GDP of $29 trillion by 2050, powered by its agriculture, trade, and natural resources sectors.

Having witnessed its worst recession in half a century in 2020, Africa’s economy is forecast to grow at a healthy pace of 3.8% in 2021 driven by rising global demand as restrictions are eased, untapped market opportunities, a rebound in commodity prices and a rise in oil prices. Africa’s growth performance and recovery pros-pects vary across regions and economic groupings.

According to Africa Devlopment Bank, East Africa seems to be the most resilient region, thanks to less reliance on primary commodities and greater diversification. It enjoyed 6.1 percent growth in 2020 and an estimated 3.7 percent growth in 2021. In 2022, growth of real GDP is projected at 5.6 percent. Southern Africa is the region that was hardest hit by the pandemic, with an economic contraction of 7.0 percent in 2020. It grew by 3.2 percent in 2021 and projected to grew 2.4 percent in 2022. GDP in West Africa is estimated to have contracted by 1.5 percent in 2020. Growth in the region was at 2.8 percent in 2021 and projected to grow 3.9 percent in 2022. In Central Africa, real GDP is estimated to have contracted 2.7 percent in 2020, however thi region economy recovered to 3.2 percent in 2021 and, growth is projected to 4 percent in 2022.The economies of North Africa contracted by an estimated 1.1 percent in 2020, and experience robust recovery of 4 percent in 2021 and is projected to grow by 6 percent in 2022.

Top 6 Richest African Countries by Overall GDP

Africa may be the least developed of the major continents, even the richest African countries lag far behind the wealthiest countries in the world, but its potential is both substantial and undeniable. The region has an eager and expanding workforce, with 20 million new job seekers a year in sub-Saharan Africa alone. Africans are starting to catch up with the rest of the world technologically as well: Every day, more than 90,000 residents of sub-Saharan Africa log on to the internet for the first time.

While there are several ways to compare various nations’ wealth, one of the best methods is to evaluate each country’s gross domestic product, or GDP. This is the value of all the goods and services produced by a nation in a given year. To make country-to-country comparisons more precise, GDP is often first adjusted for Purchasing Power Parity (PPP), which modifies each country’s GDP relative to local prices, and expressed in a fictional currency called international dollars (INT). According to the International Monetary Fund, the four top African countries posted GDPs of more than $500 billion (INT) in 2020. Using gross domestic product (GDP), one can measure the wealth of African countries:

Region Rank	Country	Nominal GDP	Peak value of GDP (PPP)	year
1	Nigeria	$440 billion	$1.14 trillion	2021
2	Egypt	$377 billion	$1.38 trillion	2021
3	S Africa	$349 billion	$861.93 billion	2021
4	Algeria	$151 billion	$532.57 billion	2021
5	Morocco	$120 billion	$302.77 billion	2021
6	Ethiopia	$110 billion	$298.57 billion	2021

6. Ethiopia

This East African country with about 115 million people (2020) has been among the fastest-growing countries in the world with an average of 10 percent per year. Ethiopia is the second-most populous nation in Africa after Nigeria, and still the fastest growing economy in the region, with 6.1 percent growth in FY2019/20.

The GDP of Ethiopia reached 110 USD Billion by the end of 2021, according to Trading Economics global macro models and analysts expectations. In the long term, Ethiopia’s GDP is projected to trend upward. Ethiopia’s location gives it strategic dominance as a jumping-off point in the Horn of Africa, close to the Middle East and its markets. Ethiopia is landlocked, bordering Eritrea, Somalia, Kenya, South Sudan, and Sudan, and has been using neighboring Djibouti’s main port for the last two decades for its international trade. However, with the recent peace agreement with Eritrea, Ethiopia is set to resume accessing the Eritrean ports of Assab and Massawa, too.

According to the World Bank report, over the past 15 years, Ethiopia has been among the fastest-growing countries in the world (at an average of 10 percent per year). Among other factors, growth was led by capital accumulation, in particular through public infrastructure investments. Ethiopia’s real gross domestic product (GDP) growth slowed down in FY2019/20 and further in FY20220/21 due to COVID-19, with growth in industry and services easing to single digits. However, agriculture, where over 70 percent of the population are employed, was not significantly affected by the COVID-19 pandemic, and its contribution to growth slightly improved in FY2019/20 compared to the previous year.

The consistently high economic growth between 2010 and 2020 resulted in positive trends in poverty reduction in both urban and rural areas. The share of the population living below the national poverty line decreased from 30 percent in 2011 to 24 percent in 2016 and human development indicators improved over time. Yet, important vulnerabilities prevail. The bottom 10 percent of the population has not grown in terms of consumption (true since 2005), especially in rural areas, and inequality is on the rise, mainly explained by the increasing disparity between urban and rural areas. Moreover, COVID-19 has increased existing vulnerabilities. 

The government has launched a new 10-Year Development Plan, based on the 2019 Home-Grown Economic Reform Agenda, which will run from 2020/21 to 2029/30. The plan aims to sustain the remarkable growth achieved under the Growth and Transformation Plans of the previous decade while facilitating the shift towards a more private-sector-driven economy.

Challenges

Ethiopia’s main challenges are continuing its positive economic growth on a sustainable basis and accelerating poverty reduction — which both require significant progress in job creation, as well as improved governance, to ensure that growth is equitable across the society. The government is devoting a high share of its budget to pro-poor programs and investments. Large-scale donor support will continue to provide a vital contribution in the near term to finance the cost of pro-poor programs. Key challenges are related to:

• Like the rest of the world, Ethiopia has been experiencing the unprecedented social and economic impact of the COVID-19 pandemic. While exports and foreign direct investment have rebounded in 2020/21 and jobs have been recovering, some lasting scars are likely to remain. Urban employment levels have not recovered fully, some households and firms continue to report income losses, and poverty is estimated to have increased.

• The conflict that started in November 2020 is likely to affect agricultural production and food security in the North of the country and could hinder economic recovery.
• Ethiopia’s Human Development Index is at a low 0.38 which means that a child born in Ethiopia today will be 38 percent as productive when s/he grows up as s/he could be if s/he enjoyed complete education and full health. This is lower than the average for the Sub-Saharan Africa region but slightly higher than the average for low-income countries. Learning poverty stands at 90 percent and 37 percent of children under 5 years of age are stunted.

According to Focus Economics, Ethiopia is set to expand this fiscal year (8 July 2021–7 July 2022), in line with easing Covid-19 restrictions and the ongoing recovery of key trading partners. However, risks are heavily skewed to the downside: The conflict threatens to derail the recovery and cause irreversible damage to the economy, while rising external debt levels further weigh on the outlook. FocusEconomics panelists see the economy growing 5.9% in FY 2021, which is up 0.3 percentage points from last month’s forecast, and 6.1% in FY 2022.

5. Morocco

After an unprecedented shock in 2020, Morocco is entering a phase of normalization as the COVID-19 pandemic eases, the agricultural sector recovers, and external demand picks up. However, the recovery remains incomplete and asymmetric.  As the crisis subsumes, the fiscal deficit is resorbing. A more moderate deficit than many of its peers at the start of the pandemic has allowed Moroccan authorities to operate a countercyclical increase in public spending in response to the crisis. 

Morocco’s real GDP growth rebound to 5.3% for the year 2021, sustained on by the extraordinary performance of the agricultural sector. Although ongoing reforms should improve the long-term performance of the Moroccan economy, the short-term outlook is subject to significant risks given the spread of new COVID-19 variants and the persisting financial vulnerability of the private sector. Poverty indicators should resume their declining trajectory in 2021, but the number of poor is only expected to return to pre-pandemic level by 2023. Available records show Morocco as the 5th largest economy by GDP on the African continent. Morocco’s GDP stood at $120 billion as of 2021. Agriculture, investments, government, and the housing sector are factors determining the growth.

According to World Bank, the incipient recovery began in late 2020, but it is still incomplete. After a 6.3% contraction in 2020, the economy posted a 1% real GDP YoY expansion during the first quarter of 2021, boosted by the strong rebound of agricultural value added (20.5% expansion) after abundant rainfall and by certain manufacturing exports. The service sector, instead, still posted a contraction, pulled by the underperformance of Morocco’s relatively large tourism industry.

Outlook

With the normalization of agricultural production, GDP growth is expected to slow to 3.2 percent in 2022. Following a successful harvest season in 2021, agricultural production is expected to contract slightly in 2022, which will reduce the overall growth rate of the Moroccan economy, as the strong base effect of 2020 wears off. This outlook, however, is subject to significant uncertainty, as the COVID-19 shock has left scars on the Moroccan private sector and as risks to the global economy intensify, especially in view of the spread of emergent COVID-19 variants.

Download Morocco World Bank report

4. Algeria

Algeria is enjoying temporarily breathing space, as hydrocarbon prices reach new highs and the COVID-19 pandemic eases. Surging hydrocarbon exports revenues are contributing to a marked decline in external financing needs and to the short-term stabilization in growing domestic financing needs.

Meanwhile, the economic recovery in nonhydrocarbon sectors lost steam, remaining largely incomplete, while inflationary risks are materializing. After a strong recovery during the second half of 2020, led by a rebound in investment and in construction activity, GDP contracted during the first and the second quarters of 2021, tracking the weakening in construction and services activity. Therefore, during the first half of 2021, GDP and nonhydrocarbon GDP remained 3.1% and 3.9% below their pre-pandemic level, respectively. According to the World Bank, real GDP growth reach 4.1% in 2021, and to decline gradually in the medium-term. The recent world bank records show Algeria is the 4th largest economy by GDP on the African continent, and it GDP stood at $151 billion for the year 2021.

Absent decisive implementation of the reform agenda, the economic outlook points to a fragile recovery, and to deteriorating fiscal and external balances in the medium-term. Amid progressive implementation of the announced structural reform agenda to kickstart investment and growth in the nonhydrocarbon segment of the economy. Meanwhile, health and education have become increasingly important dimensions of deprivation, pointing to policy priorities for further Algerian human development.

In 2021, the strong recovery in global hydrocarbon prices and demand is providing temporary relief to the Algerian economy, as well as an opportunity for the new Government to engage key structural reforms. In Q1-2021, GDP staged a modest recovery from a 4.9% contraction in 2020, as the surge in natural gas production added to the increase in OPEC crude oil production quotas to boost hydrocarbon production and exports. Supported by the lifting of lockdown measures, nonhydrocarbon GDP timidly reached Q1-2019 levels, with the rebound in construction and industrial activity overperforming the services sector.

Outlook

A fragile recovery is expected in 2021 and 2022, amid a modest one in nonhydrocarbon sectors and a strong rebound in the hydrocarbon sector. As the latter resumes its structural decline, GDP growth is expected to slow down. Despite the acceleration of the COVID-19 vaccination, deteriorated employment and firm revenues will constrain private consumption and investment, while limited fiscal space will constrain the recovery in public investment. Sustained exchange rate depreciation and high hydrocarbon prices will help contain the overall budget deficit, as higher hydrocarbon revenues balance out increases in public spending and realized contingent liabilities.

Download World Bank Executive Summary on Algeria

3. South Africa

The economy of South Africa is the third largest in Africa and the most industrialized, technologically advanced, and diversified economy in Africa overall. South Africa is an upper-middle-income economy, one of only eight such countries in Africa. Following 1996, at the end of over twelve years of international sanctions, South Africa’s Gross Domestic Product (nominal) almost tripled to its current peak at US$416 billion in 2011. According to Trading Economics, South Africa is the most developed country in Africa, with services representing 73% of its GDP.

The COVID-19 (coronavirus) pandemic is having a major impact on South Africa’s economy leading to a 6.4% contraction in 2020, as the pandemic weighed heavily on both external demand even as the government implemented containment measures. This severe contraction is estimated to increase poverty with 2 million people living below the poverty line for upper-middle income countries, on $5.5 per day in 2011 Purchasing Power Parity exchange rates, PPP.

In the world bank report, the South African economy was already in a weak position when it entered the pandemic after a decade of low growth. In 2019, the economy grew by 0.1% partially caused by the resurgence of load shedding associated with operational and financial difficulties at the energy utility Eskom. South Africa’s economic recovery in 2021 is benefiting from the favorable global environment (trade partners’ growth and commodity prices). However, pre-existing structural constraints, such as electricity shortages, continue to be binding for the medium-term outlook. Economic growth is expected to rebound to 4.0% in 2021. Commodity prices remain important for South Africa, a major net exporter of minerals and net importer of oil, however, strengthening investment, including foreign direct investment, will be critical to propelling growth and create jobs. Available data comes from World Bank shows South Africa’s GDP in 2021 stood at $349 billion.

Key Development Challenges

South Africa has made considerable strides to improve the wellbeing of its citizens since its transition to democracy in the mid-1990s, but progress has stagnated in the last decade. The percentage of the population below the upper-middle-income-country poverty line fell from 68% to 56% between 2005 and 2010 but has since trended slightly upwards to 57% in 2015 and is projected to reach 60% in 2020.

Structural challenges and weak growth have undermined progress in reducing poverty, which have been heightened by the COVID-19 pandemic. The achievement of progress in household welfare is severely constrained by rising unemployment, which reached an unprecedented 34.4 percent in the second quarter of 2021.  The unemployment rate is highest among youths aged between 15 and 24, at around 64%.

South Africa remains a dual economy with one of the highest, persistent inequality rates in the world, with a consumption expenditure Gini coefficient of 0.63 in 2015.High inequality is perpetuated by a legacy of exclusion and the nature of economic growth, which is not pro-poor and does not generate sufficient jobs. Inequality in wealth is even higher and intergenerational mobility is low meaning inequalities are passed down from generation to generation with little change over time.

2. Egypt

Egypt has the second-highest GDP in Africa, where its GDP in 2021 stood at $377 billion, according to world bank. Despite the pandemic’s effects, Egypt’s GDP grew in 2021. The country has a mixed economy profiting from fossil fuels, agriculture, and tourism, ideal for investors. The Egyptian economy continues to show the resilience it has displayed throughout the COVID-19 pandemic, due to the macroeconomic and energy sector reforms it has implemented in recent years, along with measures taken to ease monetary conditions, provide selected sectoral support, and mobilize external financing. Real GDP growth and foreign income activities started recovering in Q4-FY2020/21. However, global COVID-related challenges and an uneven recovery across the world continue to restrain the rebound. 

Growth, foreign income sources and government debt were adversely impacted by COVID-19, but are starting to improve due to favorable base effects, recovering global conditions, and easing restrictions. Sustaining the nascent uptick requires expediting vaccination, especially with risks from the Delta variant. Strengthening fiscal management to enhance social protection and human development spending whilst pushing ahead with structural reforms are crucial to unleash the private sector’s potential for export-oriented growth and job-creation, and ensure an inclusive recovery path.

Outlook

The outlook remains uncertain given the slow vaccination rate, the emergence of the Delta-variant and the resurgence of COVID-19 cases, which could threaten the recovery, especially for Egypt’s exposed sectors. Nevertheless, under the baseline scenario that assumes that the pandemic continues to ease, and lockdown measures are not reinstated, economic growth in Egypt is expected to rise from 3.3% in FY2020/2021 to 5% in FY2021/2022; supported by favorable base effects and global growth. Domestic economic activity is expected to be supported by the gradual return of tourists (especially with the resumption of flights from Russia after a 6-year hiatus), continued growth in the ICT sector, an uptick in gas extractives and exports, in addition to the public investments.

Download Egypt World Bank report

1. Nigeria

A key regional player in West Africa, Nigeria accounts for about half of West Africa’s population with approximately 202 million people and one of the largest populations of youth in the world. Nigeria is a multi-ethnic and culturally diverse federation which consists of 36 autonomous states and the Federal Capital Territory. With an abundance of natural resources, it is Africa’s biggest oil exporter on the continet. Nigeria GDP reached 440 USD Billion at the end of 2021, according to Trading Economics global macro models and analysts expectations. In the long-term, the Nigeria GDP is projected to trend around 445.00 USD Billion in 2022 and 450.00 USD Billion in 2023

In 2020, Nigeria experienced its deepest recession in two decades, but growth resumed in 2021 as pandemic restrictions were eased, oil prices recovered, and the authorities implemented policies to counter the economic shock. Nigeria was highly vulnerable to the global economic disruption caused by COVID-19, particularly due to the decline in oil prices. Oil accounts for over 80 percent of exports, a third of banking sector credit, and half of government revenues. In 2018, 40% of Nigerians (83 million people) lived below the poverty line, while another 25% (53 million) were vulnerable. The number of Nigerians living below the international poverty line is expected to rise by 12 million in 2019–23.  

As part of its COVID-19 response, the government carried out long-delayed policy reforms in 2020. Notably, it: (i) began to harmonize exchange rates; (ii) initiated reforms to eliminate gasoline subsidies; (iii) adjusted electricity tariffs to more cost-reflective levels; (iv) cut non-essential spending; and (v) enhanced debt management and increased transparency in the public sector, especially for oil and gas operations.

The COVID-19 crisis continues to disrupt Nigeria’s labor market. While it now exceeds pre-pandemic levels, improvements have been primarily due to workers turning to small-scale, non-farm enterprise activities in retail and trade, the revenues of which remain precarious.

Nigeria’s economic outlook remains highly uncertain. Uncertainty around the pace of vaccinations and the duration of COVID-19 persists. Moreover, the modest projected recovery can be threatened by volatility in the oil sector, including an unexpected shock to oil prices, and weaknesses in the financial sector. Even in the most favorable global context, the policy response of Nigeria’s authorities will be crucial to lay the foundation for a robust recovery.

Development Challenges

While Nigeria has made some progress in socio-economic terms in recent years, its human capital development ranked 150 of 157 countries in the World Bank’s 2020 Human Capital Index. The country continues to face massive developmental challenges, including the need to reduce the dependency on oil and diversify the economy, address insufficient infrastructure, build strong and effective institutions, as well as address governance issues and public financial management systems.

Inequality, in terms of income and opportunities, remains high and has adversely affected poverty reduction. The lack of job opportunities is at the core of the high poverty levels, regional inequality, and social and political unrest. High inflation has also taken a toll on household’s welfare and high prices in 2020 are likely to have pushed an additional 7 million Nigerians into poverty in 2020.

GDP per capita offers additional insight into African economies

Although GDP is an extremely valuable metric, it is also quite broad. For example, it disregards the number of citizens contributing to a country’s GDP, which means a country with a vast, but less effective workforce can post a higher GDP than a country with a smaller, but efficient workforce. To get a more granular look at this and other factors, economists often turn to GDP per capita, which divides gross domestic product by the number of people in the country. The six Richest African Countries by GDP per Capita:

1. Seychelles – $30,898
2. Mauritius – $23,841
3. Equatorial Guinea – $18,625
4. Botswana – $18,507
5. Libya – $15,816
6. Gabon – $15,582

Switching the measurement to GDP per capita has a significant impact on the list of Africa’s richest countries. Seychelles is the richest country when using this metric. The Seychelles economy is primarily driven by fishing, tourism, boat building, processing coconuts and vanilla, and agriculture, especially cinnamon, sweet potatoes, tuna, and bananas. Its public sector contributes the most employment and gross revenue, employing two-thirds of the total labor force.

Gross national income (GNI) of African economies

A final metric often used by economists to compare the wealth of different countries is gross national income, or GNI. While GDP measures the value of the goods and services a country creates, GNI measures the total income obtained through those goods and services. GNI also tracks money that enters or exits a country’s economy as part of international business activities. This makes GNI a bit better at avoiding the artificially inflated totals that can distort the GDPs of countries that are known international tax shelters. These are the top 6 Richest African Countries by GNI per Capita:

1. Seychelles – $12,720
2. Mauritius – $10,230
3. Gabon – $6,970
4. Botswana – $6,640
5. Equatorial Guinea – $5,810
6. South Africa – $5,410

Once again, Seychelles ranks first, with Mauritius close behind and countries including Botswana, Libya, Equatorial Guinea, and Gabon slotting in underneath. However, Nigeria and Egypt, which had the highest overall GDP in all of Africa, don’t even make the top 10.

source World Bank, AFDB, and Trading Economics