Last updated on 21 March 2018.
2018 is promising to be a good year for Sub-Saharan African economies. The world’s six fastest-growing economies are on the continent. The World Bank forecasts growth of 3.2% for the year, up from 2.4% in 2017. It also predicts a slightly higher growth rate of 3.5% for 2019.
According to the Economist Corporate Network (ECN), in the last twenty years, the center of the global economy has been shifting from the developed to the developing world. Today, growth rates in developing economies are many times higher than in developed economies.
Ultimately, as The Brookings Institution points out in its Foresight Africa 2018 report, half of sub Saharan Africa’s economies will grow at a rate similar to or higher than during the years of the “Africa rising” narrative, which was in the run-up to the commodity price crash of 2014.
These countries are certainly not the most developed ones, but their economic progress is praiseworthy.
1. Ghana
Ghana is a tale of remarkable fortunes. In the 1980s, the country was mired in poverty. With a series of military coups, the situation was not good for the Ghanaian people. However from 1992 up to now, the country has managed to hold peaceful elections and their economy has made a strong rebound.
The discovery of major offshore oil deposits helped the recuperation of the economy. This year, Ghana is the world’s fastest growing economy as revealed by the World Bank, Brookings Institution, International Monetary Fund and the African Development Bank.
Oil prices have risen, and the country’s oil production has rapidly expanded. GDP growth at market price stands at 8.3% and is projected to reach 8.9%. In January, Ghana’s benchmark stock index achieved the world’s highest rate of growth, 19 percent.
Summary of the country’s GDP growth rate:
2015: 3.8%
2016: 3.5%
2017: 5.9%
2018: 8.3%
Cocoa production is also complementing the oil boom in creating such a fast-rising economy.
Economy snapshot:
Ghana has a market-based economy with relatively few policy barriers to trade and investment in comparison with other countries in the region. Ghana is also well-endowed with natural resources.
Ghana's economy was strengthened by a quarter century of relatively sound management, a competitive business environment, and sustained reductions in poverty levels, but in recent years has suffered the consequences of loose fiscal policy, high budget and current account deficits, and a depreciating currency.
2. Ethiopia
Ethiopia’s hold on being Africa’s fastest growing economy for years has been eclipsed by Ghana. However, the country's economy continues to grow. According to the Gates Foundation’s report dubbed “One foot on the ground, one foot in the air”, compiled by the Overseas Development Institute, the agriculture sector has enhanced the growth and development of Ethiopia.
The real GDP growth rate for the country stands at 8.2% according to the World Bank. Despite the political turmoil that the country goes through, the IMF belive that the good times will last for some time.
Summary of the country’s GDP growth rate:
2015: 10.4%
2016: 8%
2017: 8.5%
2018: 8.2%
On average, Ethiopia’s economy is growing at 10% a year and it is expected to double within the next seven years. This means that by 2025, it will have grown to a middle-income nation. This is as reported by the World Bank.
Economy snapshot:
Ethiopia’s economy is concentrated in the services and agriculture sectors. The government has made a push to diversify into manufacturing, textiles, and energy generation. But while the country has seen and (per the World Bank) will continue to see high GDP growth, the per capita income remains one of the lowest in the world.
3. Cote d'Ivoire
In 2017, Côte d’Ivoire continued to be one of the most buoyant economies in Africa, with a growth rate expected to hold steady at around 7.6%. This time around, growth is forecasted at 7.2 %, a clear signal of a constant strong economic performance.
This positive performance is due to the recovery in and shows Côte d’Ivoire’s resilience to domestic and foreign shocks. The short- and medium-term outlook remains encouraging.
With the help of IMF, the country has been able to collect more taxes and control government spending which has lowered the budget deficit including grants.
Summary of country’s GDP growth rate:
2015: 8.9%
2016: 7.7%
2017: 7.6%
2018: 7.2%
Economy snapshot:
About two-thirds of the population works in agriculture-related industries. The country is the world’s largest producer and exporter of cocoa beans and is also a major player in the coffee and palm-oil industries.
4. Djibouti
A small port country, Djibouti's economy hinges on services that take advantage of its strategic location at the Red Sea's southern entrance, as well as foreign investments and financing.
The GDP of Djibouti increased in 2016 by 6.5% as a result of construction, transport services and port development. The forecast for this year puts growth at exactly 7%.
The establishment of a free zone within the country, as well as the profits from a railway leading to Ethiopia, are also drivers of growth.
Summary of country’s GDP growth rate:
2015: 6.5%
2016: 6.5%
2017: 7%
2018: 7%
Economy snapshot:
Djibouti's economy is based on service activities connected with the country's strategic location as a deepwater port on the Red Sea. Three-fourths of Djibouti's inhabitants live in the capital city; the remainder are mostly nomadic herders. Scant rainfall and less than 4% arable land limits crop production to small quantities of fruits and vegetables, and most food must be imported.
5. Senegal
Senegal wrapped up 2017 with the inauguration of its new airport that authorities hope will serve 3 million passengers, a hallmark of the country’s consistent positive growth records in the past few years.
In its third quarter in 2017, the Senegalese economy grew at rate of 7.1%, its strongest since the last quarter of 2015, when it was at an all-time high. Growth for 2018 is forecast at 6.9%.
Summary for country’s GDP growth rate:
2015: 6.8%
2016: 6.7%
2017: 6.8%
2018: 6.9%
President Macky Sall has the goodwill to forge ahead, not only in his country but as a leader in francophone West Africa.
Economy snapshot:
Senegal’s economy is driven by mining, construction, tourism, fisheries and agriculture, which are the primary sources of employment in rural areas. The country's key export industries include phosphate mining, fertilizer production, agricultural products and commercial fishing and it is also working on oil exploration projects. Senegal relies heavily on donor assistance, remittances and foreign direct investment. Senegal reached a growth rate of 6.5% in 2015 and surpassed that in 2016-17, due in part to a buoyant performance in agriculture because of higher rainfall and productivity in the sector.
6. Tanzania
Tanzania has achieved high growth rates based on its vast natural resource wealth and tourism with GDP growth in 2009-17 averaging 6%-7% per year. This year, growth is expected to hover around 6.8%.
Despite looming poverty in the country, the new political leader, President John Magufuli is a promising change to the country. He is already in the process of minimizing the country’s overspending by cutting cost of unnecessary government spending, although this has come with concerns that the country’s democracy is being eroded gradually due to Magufuli’s autocratic practices.
Summary of country’s GDP growth rate:
2015: 7%
2016: 7%
2017: 6.5%
2018: 6.8%
Economy snapshot:
Tanzania has recently seen high growth rates because of gold production and tourism. The economy also runs on telecommunications, banking, energy, and mining, as well as agriculture. In terms of per capita income, however, the country is one of the poorest in the world.
Editor's note: This post was originally published in July 2015 and has been completely updated for accuracy, relevance and comprehensiveness.