Ethiopian Business Review

Top 10 African Countries by Economic Growth

The rapid and uninterrupted growth rate of Ethiopia’s Gross Domestic Product (GDP) has put the country as the fastest growing economy among 55 African countries, according to a report released last month by the United Nations Economic Commission for Africa and the African Union. The annual report, entitled “Dynamic Industrial Policy in Africa,” states that Ethiopia has registered a 9.4Pct growth, on average, during the past five years. According to the report, Ethiopia recorded the fastest growth reflecting expansion in services and construction, aggressive public spending on infrastructure and public services, and increasing agricultural production associated with rising domestic demand. 

Ethiopia’s massive public spending has created one of Africa’s fastest-growing economies, but a volatile balance of payment pressure and a stifled private sector still raise questions over the sustainability of the economic growth. Massive projects in the areas of energy, transport and manufacturing require roughly 15Pct of the country’s GDP, according to International Monetary Fund (IMF) estimates. Many experts and international organizations like the IMF and World Bank stress that due to the large amount of money diverted to finance these projects, the activities and participation of the private sector is becoming insignificant in the economy.

Libya, despite being in a political turmoil, managed to expand its economy by 8.7Pct during the last five consecutive years, while Zimbabwe, struggling with galloping inflation, registered an 8.4Pct yearly average GDP growth rate. 

Overall, Africa’s growth slowed from 5.7Pct in 2012 to 4Pct in 2013. However, the continent’s growth is still almost twice the global average, but slightly lower than the average for developing countries. Africa was surpassed only by Asia, which grew at 5.6Pct in 2013. The report advised African governments to place credible industrial policies at the centre of their macroeconomic strategies to achieve inclusive growth. 

RankCountryYearly Average GDP Growth (%)
1 Ethiopia 9.4
2 Libya 8.7
3 Zimbabwe 8.4
4 Ghana 8.3
5 Liberia 7.8
6 Rwanda 7.5
7 Sierra Leone 7.4
8 Nigeria 7.0
9 Mozambique 6.8
10 Tanzania 6.7

2nd Year . July 2014 . No.16

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