South Africa –The Largest African Economy
South Africa is the only country in Africa that is part of the BRICS (Brazil, Russsia, India, China and South Africa). Study shows that the BRICS could become one of the four most dominant economies by 2050. These countries encompass over 25% of the world’s land coverage and 40% of the world’s population and hold a combined Gross Domestic Product (GDP) at Purchasing Power Parity (PPP) of $18.49 trillion.
With an economic size of about $577 billion, South Africa is ranked as the largest African economy. Its close linkage with the global economy has made South Africa’s economy suffer from the worsened economic lull in Europe and China, the two main export destinations of the country. Thus resulting in weakened growth prospects, lower fiscal revenues, volatile valuation of the rand, and dampened external financing.
Egypt –Second Biggest Economy In Africa
With about 82.5 million population and an economy size of approximately $525 billion, Egypt is ranked second biggest economy in Africa. It has one of the most developed and diversified economies in the Middle East. Agriculture, industry and services represent almost equal rates in national production. However, despite the high levels of economic growth over the past few years, living conditions for the average Egyptian remain poor. This was aggravated by the recent unrest as it has hit tourism and foreign direct investment, two key sources of foreign reserves.
Nigeria –The Preferred Destination For Investment In Africa
Nigeria has become the preferred destination for investment in Africa with an economy size of about $247 billion coupled with its growing population of over 160 million. It is ranked first in the top five host economies for foreign direct investment in Africa, accounting for over 20 of total FDI flows into the continent. The Investment Climate Reform Programme has helped to attract over ₦6.8 trillion local and foreign direct investments within the first ten months of 2012.
Successive governments in Nigeria have since independence, pursued the goal of structural changes without much success. The growth dynamics have been propelled by the existence and exploitation of natural resources and primary products. Initially, the agricultural sector, driven by the demand for food and cash crops production was at the centre of the growth process, contributing 54.7% to the GDP during the 1960s. The second decade of independence saw the emergence of the oil industry as the main driver of growth. Today, Nigeria is a mono-economy that is highly dependent on oil which accounts for 75% of government’s revenue.
Algeria –Hydrocarbon Driven Economy
The Algerian economy is largely driven by hydrocarbon and it is estimated at $275 billion. With 10% of its population under employed, Algeria’s 37 million population has unemployment rate of 21.5%. Hydrocarbon in Algeria accounts for approximately 60% of budget revenues, 30% of GDP, and over 95% of export earnings. Algeria is the sixth largest exporter of gas and is ranked 10th in natural gas reserves in the world. It has a $183 billion in foreign reserves and a large hydrocarbon stabilisation fund. Its external debt is extremely low at about 2% of GDP. Efforts are ongoing by the government to diversify the economy by attracting foreign and domestic investments outside the energy sector.
Morocco –The Fifth African Economy By GDP
Morocco’s $99 billion liberal economy is adjudged to be the fifth African economy by GDP (PPP). The country has witness steady economic growth with a 4.9% year-on-year growth. Economic growth is far more diversified, with new service and industrial sectors development. Morocco’s economic growth eased to 2.6% in the second quarter from 2.8% in the first quarter of 2012 as weakening agriculture and consumption growth took their toll on the economy.
In general, the Nigerian economy has grossly underperformed relative to her enormous resource endowment and her peer nations. It has the 6th largest gas reserves and the 8th largest crude oil reserves in the world. It is endowed in commercial quantities with about 37 solid mineral types and has a population of over 160 million. Yet, economic performance has been rather weak and does not reflect these endowments.
The prospects for growth in Nigeria are very bright going by the achievements recorded during the last ten years and the current reforms in the various sectors. However, for Nigeria to consolidate these economic gains and move higher in the frontlines of growth and development, it must deepen reforms that improve human capital, promote high-quality public infrastructure, and encourage competition. The pillars to sustain this consolidation must include a firm fiscal policy, transparent fiscal operations, development-oriented monetary and exchange rate policies, strengthening of the financial sector and strict adherence to the rule-of-law.