With a decade of growth of 5.4%, the economic outlook for Africa is improving and indicates a fundamental change on the continent. For the first time in over three decades, a large number of African countries have begun to show sustained economic growth at rates that are similar to the rest of the developing world, and exceed that of most of the developed countries.
Some of the key factors for the improved fortunes include more effective trading practices by African countries, high energy prices which have benefited the big oil exporting countries and the expanding of diversified economies such as that of Tunisia.
However, it is not all a success story as countries with few natural resources or those that are prone to conflicts are experiencing little or no growth and are in danger of being left behind by the others.
Poor infrastructure and the high cost of exporting from Africa compared to other regions of the world have been identified as dangers to continued sustained growth rather than any failures of African enterprise or workers. Volatility in sub-Saharan Africa and corruption are also factors that limit growth on the continent.
ClickAfrique lists top ten fastest growing economies in Africa below:
GDP Growth Rate (%): 16.30 Global Rank: 4
One of the fastest growing economies in the world, Angola's high growth rate is driven by its oil sector, with record oil prices and rising petroleum production. A postwar reconstruction boom and resettlement of displaced persons has led to high rates of growth in construction and agriculture as well. Angola is currently rebuilding the country's infrastructure, which is still damaged or undeveloped from the 27-year-long civil war, with lines of credit from China, Brazil, Portugal, Germany, Spain, and the EU. Corruption, especially in the extractive sectors, and the negative effects of large inflows of foreign exchange, are major challenges facing Angola.
GDP Growth Rate (%): 12.80 Global Rank: 6
Sudan's economy is blooming on the back of increases in oil production, high oil prices, and large inflows of foreign direct investment. GDP growth registered more than 10% per year in 2006 and 2007. The Darfur conflict, the aftermath of two decades of civil war in the south, the lack of basic infrastructure in large areas, and a reliance by much of the population on subsistence agriculture remain major challenges to the country.
3. Equatorial Guinea
GDP Growth Rate (%): 12.70 Global Rank: 7
The discovery and exploitation of large oil reserves have contributed to dramatic economic growth in recent years and Equatorial Guinea now has the fourth highest per capita income in the world, after Luxembourg, Bermuda, and Jersey. Forestry, farming, and fishing are also major components of GDP. A dominant subsistence farming culture, underdeveloped natural resources include titanium, iron ore, manganese, uranium, and alluvial gold as some of the key issues facing the economy. Other key issues include the distribution of wealth and corruption as government officials and their family members own most of the businesses.
GDP Growth Rate (%): 9.80 Global Rank: 14
Ethiopia's poverty-stricken economy is based on agriculture, accounting for almost half of GDP, 60% of exports, and 80% of total employment. The agricultural sector suffers from frequent drought and poor cultivation practices. Drought and Ethiopia's land laws, the state owns all land and provides long-term leases to the tenants, continue to hamper growth. The drought which struck late in 2002 led to a 3.3% decline in GDP in 2003 but normal weather patterns helped agricultural and GDP growth recover during 2004-07.
GDP Growth Rate (%): 8.50 Global Rank: 20
Civil war and government mismanagement destroyed much of Liberia's economy, especially the infrastructure in and around the capital, Monrovia. However since the conclusion of fighting, steps have been to reduce corruption, build support from international donors, and encourage private investment. Embargos on timber and diamond exports have been lifted, opening new sources of revenue for the government.
GDP Growth Rate (%): 7.50 Global Rank: 34
Since embarking on a series of macroeconomic reforms designed to stabilize the economy in the late 1980s and achieving political stability since the multi-party elections in 1994, Mozambique has had dramatic improvements in the its growth rate. Fiscal reforms, including the introduction of a value-added tax and reform of the customs service, have improved the government's revenue collection abilities. In spite of these gains, Mozambique remains dependent upon foreign assistance for much of its annual budget, and the majority of the population remains below the poverty line. Mozambique's once substantial foreign debt has been reduced through forgiveness and rescheduling under the IMF's Heavily Indebted Poor Countries (HIPC) and Enhanced HIPC initiatives, and is now at a manageable level.
GDP Growth Rate (%): 7.20 Global Rank: 39
In 2005, the Egyptian government reduced personal and corporate tax rates, reduced energy subsidies, and privatized several enterprises. This led to a boom in the stock market, an increase in direct foreign investment and GDP grew about 5% per year in 2005-06, and topped 7% in 2007. Despite these achievements, the government has failed to raise living standards for the average Egyptian, and has had to continue providing subsidies for basic necessities. The subsidies have contributed to a sizeable budget deficit - roughly 7.5% of GDP in 2007 - and represent a significant drain on the economy. However, Egypt's export sectors - particularly natural gas - have bright prospects.
8. Democratic Republic of Congo
GDP Growth Rate (%): 7.00 Global Rank: 40
The economy of the Democratic Republic of the Congo is slowly recovering from two decades of decline. The government reopened relations with international financial institutions and international donors, and has begun implementing reforms, although progress is slow. Renewed activity in the mining sector, the source of most export income, boosted the government's fiscal position and GDP growth. Government reforms and improved security may lead to increased government revenues, outside budget assistance, and foreign direct investment, although an uncertain legal framework, corruption, and a lack of transparency in government policy are continuing long-term problems.
9. Cape Verde
GDP Growth Rate (%): 7.00 Global Rank: 41
This island economy suffers from a poor natural resource base, including serious water shortages exacerbated by cycles of long-term drought. The economy is service-oriented, with commerce, transport, tourism, and public services accounting for about three-fourths of GDP. In 2007 the United Nations graduated Cape Verde from the category of Least Developed Countries, only the second time this has happened to a country.
GDP Growth Rate (%): 7.00 Global Rank: 42
Gambia has no confirmed mineral or natural resource deposits and has a limited agricultural base. Gambia's natural beauty and proximity to Europe has made it one of the larger markets for tourism in West Africa. Unemployment and underemployment rates remain extremely high with small-scale manufacturing activity featuring the processing of peanuts, fish, and hide.