Infographic: Top Economies in Sub-Saharan Africa (2024)

Before the European colonization in the late 19th century, Africa had a very long history of state building as well as a rich variety of social formations that were decentralized or stateless. Some of the first examples of state formation in human history developed in the Nile River valley in the 4th millennium BCE. Between the 7th and 19th centuries, several large states emerged in the Sahel and in eastern and southern Africa. Key to their rise and prosperity was a growing population and agriculture as well as expanding trade, either through the trans-Saharan trade to the Mediterranean or across the Indian Ocean to Asia and the Arabian Peninsula.

Africa’s fortunes dipped with the onset of the trans-Atlantic slave trade, which ravaged the continent and led to Africa losing millions of people to the New World. Following the abolition of slavery in the 19th century, Europe partitioned and colonized the continent and presided over varied economic regimes. These were settler colonies, peasant-agricultural colonies, and concession company colonies. Of the three, settler colonies developed most, although at the expense of the African majority. Independence came after the Second World War and Africa entered its postcolonial phase.

After a promising start in the decade of the 1960s, African economies went into decline in the 1970s, necessitating governments to borrow from the World Bank and the International Monetary Fund (IMF) in order to revamp their economies. The structural adjustment programs they were required to implement as a condition for the loans proved to be deleterious to African economies. The peaceful constitutional transition from apartheid to a new democratic and non-racial dispensation in the Republic of South Africa under the leadership of President Nelson Mandela kindled domestic and international confidence in that country’s future. A number of other countries also made the transition from long- established one-party rule to multi-party democratic governance under remarkably peaceful conditions. The majority of African countries continued to implement economic reforms, but at considerable social costs.

Africa will account for eleven of the world’s 20 fastest-growing economies in 2024, according to the African Development Bank Group’s Macroeconomic Performance and Outlook (MEO) of the continent. The report said the overall, real gross domestic product (GDP) growth for the continent is expected to average 3.8% and 4.2% in 2024 and 2025, respectively. This is higher than projected global averages of 2.9% and 3.2%. The continent is set to remain the second-fastest-growing region after Asia. According to the International Monetary Fund, South Africa, Egypt, Algeria, and Nigeria will remain the top four economies in Africa until 2030. The Washington-based institution projects that South Africa, Africa’s most industrialised country, will become Africa’s biggest economy with a GDP of $373 billion–a position the IMF expects it to retain until 2027. Egypt, which held the top position in 2023, is expected to drop to second place behind South Africa, primarily due to a series of currency devaluations.

Facts and Figures

• State of the economies in sub-Saharan Africa

Nigeria, once dubbed Africa’s largest economy, is set to relinquish its crown and slide to fourth place this year for similar reasons. Both countries have seen a downturn in their economic fortunes due to high inflation and a sharp devaluation of their currencies. Despite a recent recovery, the naira remains 50% weaker against the dollar compared to its value before President Bola Tinubu took office last May. Egypt, one of the emerging world’s most-indebted countries and the IMF’s second-biggest borrower after Argentina, also devalued its currency by over 35% to open the door for additional loans from the International Monetary Fund. According to the IMF’s World Economic Outlook, Nigeria’s gross domestic product is estimated at $253 billion based on current prices this year, trailing Algeria’s at $267 billion, Egypt’s at $348 billion, and South Africa’s at $373 billion.

Sub-Saharan Africa, home to 30 percent of the world’s critical minerals, is on the brink of a major transformation with the global move towards clean energy. Whereas the extraction of select minerals could boost the region’s GDP by 12 percent or more by 2050, advancing beyond exporting raw materials to developing processing industries presents an even larger opportunity. A regional strategy built on cross-border collaboration and integration can leverage the diversity of minerals and create a larger, more attractive regional market for much needed investment.

However, after four turbulent years, the outlook for sub-Saharan Africa is gradually improving. Growth will rise from 3.4 percent in 2023 to 3.8 percent in 2024, with nearly two thirds of countries anticipating higher growth. Economic recovery is expected to continue beyond this year, with growth projections reaching 4.0 percent in 2025. Additionally, inflation has almost halved, public debt ratios have broadly stabilized, and several countries have issued Eurobonds this year, ending a two-year hiatus from international markets. In early 2024, private sector activity picked up, buoyed by a strengthening global economy. At the same time, many economies in the region continue to struggle with weak government balance sheets, stemming partly from low revenue collection and high debt-service costs, while some also need to manage the adverse effects of currency depreciations.

• Nigeria

Nigeria’s ambitious revenue targets for 2024 depend heavily on oil prices and reform implementation. Historically, actual revenue realised has averaged less than 70% of the total budget. Achieving budgeted oil revenue in 2024 will depend on OPEC oil production quota, international oil prices, improved security in the oil-producing regions, and geopolitical factors. The proposed fiscal reforms have potential to boost non-oil revenue and shape the economy, but success hinges on effective budgeting and execution. FDI flows are expected to improve in 2024 driven by notable expansion in the growing ICT and Manufacturing sectors.

• South Africa

In South Africa, growth weakened to 0.6 percent in 2023. Economic activity remained subdued in early 2024 as the economy continued to struggle with a broad-based deterioration in public service delivery, including electricity supply shortages, transport bottlenecks, and a high crime rate. Household consumption continues to be constrained by high unemployment, while investment languishes amid weak business confidence. According to report by Rand Merchant Bank titled, ‘Where to Invest in Africa’, South Africa ranked 4th best African country to invest in 2024. It ranked first in market accessibility and innovation, 5th in economic performance and potential, 7th in economic stability and investment climate and 29th in social and human development. Power cuts and operational problems in freight rail and ports continue to disrupt economic activity and limit the country’s export potential. Comprehensive reforms are under way in these sectors, although it will take time to see a recovery in growth. Household consumption is under pressure from high living costs, and investment remains low due to weak confidence and challenging business conditions linked to structural constraints.

• Angola

Growth in Angola slowed to 0.9 percent in 2023, reflecting falling oil production and a loss of dynamism in non-oil sectors. According to the data from the Bank of Tanzania, in 2021 Agriculture (agriculture, forestry, and fishing) accounted for 27% of the country’s GDP, Industry and Construction for 31%, and Services for 42%. The main sectors of the Tanzanian economy in terms of their contribution to the GDP are Construction which accounts for 16%, Crops (14%), Manufacturing (9%), Wholesale and retail trade; repairs (9%), Transport (8%), Livestock (8%), and Mining and Quarrying (5%). However, in the quarter ending September 2022, Mining and Quarrying reached 9.8% of the country’s GDP.

• Tanzania

Another major sector of Tanzania’s economy is tourism whose contribution to GDP fell from 10.6% in 2019 to 5.3% in 2020 due to the impact of the Covid-19 pandemic and climbed to 5.7% in 2021. While the World Investment Report of 2022 published by the United Nations Conference on Trade and Development (UNCTAD) noted that foreign direct investment (FDI) to Tanzania rose by 35% to USD 922 million in 2021 from USD 695 million in 2020. According to the Monthly Investment Bulletin-March 2023 released by the Tanzania Investment Center (TIC), the top five leading sources of FDI to Tanzania are China, the USA, Mauritius, Spain, and India.

• Ethiopia

Ethiopia has been one of the fastest-growing economies over the past two decades. GDP growth has averaged around 10% in most years. However, this was largely driven by public investment, which resulted in high government debt. The weak growth of the private sector meant the country produced little to export, contributing to a shortage of foreign exchange. Ethiopia’s economy grew by 7.2 percent in 2023 according to the Government figures, while the IMF estimated the economy grew by 6.1 percent. Services sector remains resilient, while manufacturing continues to be weak. Independent estimates show that Ethiopia’s economy grew as low as 4.5 percent in 2023.

• Kenya

Kenya’s economy continues to show considerable resilience in the face of recent shocks, including the lasting economic effects of the COVID-19 pandemic, the global impacts of the war in Ukraine, two consecutive years of droughts, tight monetary policy, and depreciation of the currency. Kenya’s real GDP expanded at an estimated 5.4% in 2023 from 4.8 % in 2022. The agricultural sector experienced a stronger than expected rebound after two years of drought. The onset of the rains led to improved crop yields and livestock health, which supported the resumption of a downward trajectory for poverty rates. The poverty rate ($2.15 international poverty rate) is projected to have declined from 35.8% in 2022 to 35.1% in 2023. While Kenya’s real GDP growth accelerated to 5.6% in 2023, surpassing the previous year’s growth of 4.9%.

Below are the 10 largest economies in Africa in 2024 according to IMF:

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*Sources: International Monetary Fund (IMF); World Bank (WB); African Development Bank (AfDB); Oxford University Press; The Trustees of the University of Pennsylvania; Bank of Tanzania (BoT); Business Insider Africa; Tanzania National Bureau of Statistics; Rand Merchant Bank Report.