Economy of Africa

The continent of Africa has a diversified developing economy across the second-largest continental land-mass in the world. It ranks as the world's 5th-largest continental economy with 54 national economies and a large informal economy. With a population of 1.47 billion, the African economy generates $2.83 trillion in nominal gross domestic product (GDP) and over $10 trillion in purchasing power parity (PPP) GDP.

Africa is home to many of the world's fastest-growing economies because of its abundant emerging markets. These economies are economically integrated within their supranational organization, the African Union (AU). Despite being the least wealthy inhabited continent per capita and second-least wealthy by total wealth, ahead of Oceania, Africa has a large youthful population and is a significant consumer market.

The continent has a wealth of natural resources, and its largest sectors include agriculture, trade, and industry. The most developed regions are North Africa, West Africa, and Southern Africa.

History

Further information: Economic history of Africa, Scramble for Africa, and Industrialisation in Africa

For a long time, African economies were based on farming, raising animals, or trading. They used land, workers, and tools to decide how to organize their work. Common jobs included making clothes and working with metals.

Africa's economy has always been rich and varied, with many trade routes connecting cities and kingdoms. Big African empires grew wealthy from their trade, like Ancient Egypt, Nubia, Mali, Ashanti, the Oyo Empire and Ancient Carthage. Some parts of Africa traded a lot with Arab kingdoms. Later, the Portuguese came to Africa looking for new trade routes.

When European countries took control of Africa, they changed the way people worked. They made large farms to grow things like palm oil, rubber, and cotton to send to Europe. They also dug up valuable minerals like gold. This often hurt local ways of life and forced many people to work in tough conditions.

After Africa gained independence, new leaders tried different ways to grow their economies. They wanted to make more things locally instead of buying from other countries. But this was hard, and many countries still relied on selling raw materials.

In recent years, Africa has seen growth, especially in countries rich in oil and minerals. New trade agreements aim to help African countries trade more with each other and rely less on other parts of the world. Despite challenges like the effects of the COVID-19 pandemic, Africa continues to work toward stronger economies.

Economic development

The economy of Africa has faced many challenges that make it hard for countries to grow and become wealthier. Problems like wars, unfair leaders, and bad government decisions have hurt progress. Even before European countries took control, Africa had its difficulties, but colonial rule added more problems by taking valuable resources without helping local economies.

Today, many experts believe that better roads, electricity, and communication networks could help Africa grow faster. Also, good leadership and less corruption are very important for building a stronger economy. Some people think that past colonial rules still affect Africa today, while others believe that local problems like language differences and trade rules also play a big role.

Foreign trade

The African Union is a big group of countries working together to help each other. They want to make it easier to trade goods between countries, use the same money, and support growth. They also plan to build banks and funds to help countries develop.

Many regions in Africa have groups that work on trade and growth. These groups help countries trade with each other more. Right now, most trade in Africa happens with countries outside the continent, but these groups are trying to change that.

Economic variants

After a quick recovery from the 2009 world economic crisis, Africa's economy faced challenges in 2011 due to political changes in some areas. Growth dropped from 5% in 2010 to 3.4% in 2011. But things improved again, and growth was expected to rise to 4.5% in 2012 and 4.8% in 2013. Some problems continued for the global economy as Europe dealt with money issues. Prices for important goods like minerals and crops went down because there was less demand and more supply, but they were still good for sellers in Africa.

Regions

Economic activity improved across Africa, but not all areas grew at the same speed. Countries that sell oil did better than those that need to buy oil. In 2010, West Africa and East Africa were the strongest areas.

Trade between African countries has been slow because of rules that make it hard to trade, and it stays low at 17 percent. In Europe, trade between countries is much higher at 69 percent. However, trade among countries in the Common Market for Eastern and Southern Africa (COMESA) grew six times bigger over the past ten years up to 2012. Places like Ghana and Kenya now trade more things like building supplies, machines, and finished goods, instead of just minerals and crops.

In 2010, African trade ministers decided to create a Pan-Africa Free Trade Zone. This would make it easier and cheaper to trade between African countries and help grow the economy in many ways.

African nations

Country	Total GDP (nominal) in 2019 (billion US$)	GDP per capita in 2019 (US$, PPP)	Average annual real GDP growth 2010–2019 (%)	HDI 2019
Algeria	169.3	11,729	2.6	0.748
Angola	89.4	7,384	1.9	0.581
Benin	14.4	3,423	5.1	0.545
Botswana	18.5	17,949	4.3	0.735
Burkina Faso	15.7	2,282	5.7	0.452
Burundi	3.1	821	2.0	0.433
Cameroon	38.9	3,856	4.6	0.563
Cape Verde	2.0	7,471	2.9	0.665
Central African Republic	2.3	985	−1.8	0.397
Chad	10.9	1,654	2.2	0.398
Comoros	1.2	3,108	3.1	0.554
DR Congo	49.8	1,015	6.1	0.480
Congo	12.5	4,600	−1.0	0.574
Djibouti	3.3	5,195	6.6	0.524
Egypt	302.3	12,391	3.8	0.707
Equatorial Guinea	11.8	19,291	−2.9	0.592
Eritrea	2.0	1,836	3.4	0.459
Eswatini (Swaziland)	4.6	9,245	2.4	0.611
Ethiopia	92.8	2,724	9.5	0.485
Gabon	16.9	16,273	3.7	0.703
Gambia	1.8	2,316	2.4	0.496
Ghana	67.0	5,688	6.5	0.611
Guinea	13.8	2,506	6.2	0.477
Guinea-Bissau	1.4	2,429	3.8	0.480
Ivory Coast	58.6	5,327	6.7	0.538
Kenya	95.4	4,985	5.6	0.601
Lesotho	2.4	3,010	2.8	0.527
Liberia	3.2	1,601	2.7	0.480
Libya	39.8	14,174	−10.2	0.724
Madagascar	14.1	1,720	3.4	0.528
Malawi	7.7	1,004	3.8	0.483
Mali	17.3	2,508	4.3	0.434
Mauritania	7.6	6,036	3.9	0.546
Mauritius	14.0	23,819	3.6	0.804
Mayotte (France)	3.1 (2018)	11,815 (nominal, 2018)	(N/A)	(N/A)
Morocco	118.6	8,148	3.4	0.686
Mozambique	15.2	1,302	5.4	0.456
Namibia	12.5	10,279	2.8	0.646
Niger	12.9	1,276	5.9	0.394
Nigeria	448.1	5,353	3.0	0.539
Réunion (France)	22.0	25,639 (nominal)	2.1	0.850 (2003)
Rwanda	10.1	2,363	7.6	0.543
São Tomé and Príncipe	0.4	4,141	3.9	0.625
Senegal	23.6	3,536	5.3	0.512
Seychelles	1.7	30,430	4.6	0.796
Sierra Leone	4.2	1,778	4.4	0.452
Somalia	18.2	888.00	(N/A)	0.364 (2008)
South Africa	351.4	12,962	1.5	0.709
South Sudan	4.9	862	(N/A)	0.433
Sudan	33.4	4,140	−1.6	0.510
Tanzania	60.8	2,841	6.7	0.529
Togo	5.5	1,657	5.6	0.515
Tunisia	38.8	11,125	1.8	0.740
Uganda	36.5	2,646	5.2	0.544
Zambia	24.2	3,526	4.3	0.584
Zimbabwe	18.7	2,896	4.2	0.571

Economic sectors and industries

Africa's economy depends a lot on selling natural resources, which makes its earnings change with prices around the world. This makes it important for Africa to grow in other ways too. Travel and tourism have been growing since 2012, showing Africa has promise in these areas.

Agriculture

48% of people working in Africa do jobs related to farming, more than anywhere else in the world. Many African countries grow food to sell to other countries, but many people on the continent go hungry. This happens partly because richer countries protect their own farmers with rules that make it hard for farmers in Africa to sell there. These rules help farmers in rich countries but make it tough for farmers in Africa to compete.

Some countries, like Brazil, are helping Africa grow more food by sharing knowledge. More investment in farming tools could help reduce poverty in Africa. There is also growing demand for African products like cocoa, and some countries are making plans to grow more of these products.

Energy

Africa has lots of energy resources like water power, oil, gas, coal, and sunshine, but it doesn't use much of them yet. Some countries, like South Africa, use a lot of energy, while others, like Ethiopia, use very little.

Oil and gas are important exports for many African countries. Only South Africa uses power from atoms to make energy.

Infrastructure

Africa needs better roads, railways, and ports to help businesses grow. Building these things can make trade easier and cheaper.

Many countries in Africa are building new roads, railways, and airports. They are also improving ways to send and receive information, like mobile phones and the internet.

Mining and drilling

Africa has a lot of important minerals like diamonds, cobalt, and platinum. These minerals are very valuable and help many countries grow their economies. Africa has lots of minerals needed for new technologies like clean energy, which could help the continent grow in a sustainable way.

Manufacturing

There are plans to help Africa grow factories and make more things, like clothes, cars, and electronics. Some countries, like Nigeria, are already making buses, trucks, and computers. Other countries are also starting to make things like clothes and leather goods.

Investment and banking

Africa's banking and money systems are growing fast, especially as more people have money to spend. Countries like China and India are investing more in Africa. There are also many banks and stock markets in Africa, though they are still small compared to the rest of the world.

African stock exchanges

Stock exchange name	City	Country	Year founded	Currency
Angola Debt and Stock Exchange	Luanda	Angola	1995	Angolan kwanza
Botswana Stock Exchange	Gaborone	Botswana	1995	Botswana pula
Cape Town Stock Exchange	Cape Town	South Africa	2016	South Africa rand
Eswatini Stock Exchange	Mbabane	Eswatini	1990	Eswatini lilangeni
Ethiopian Securities Exchange	Addis Ababa	Ethiopia	2025	Ethiopian birr
Johannesburg Stock Exchange Limited	Johannesburg	South Africa	1887	South Africa rand
Lusaka Stock Exchange	Lusaka	Zambia	1994	Zambian kwacha
Malawi Stock Exchange	Blantyre	Malawi	1996	Malawi kwacha
Namibian Stock Exchange	Windhoek	Namibia	1904	Namibian dollar
Rwanda Stock Exchange	Kigali	Rwanda	2011	Rwandan franc
Victoria Falls Stock Exchange	Victoria Falls	Zimbabwe	2020	United States dollar
Zimbabwe Stock Exchange	Harare	Zimbabwe	1896	Zimbabwe dollar