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Africa’s Economy is Growing Fast

October 23, 2012

This is the third of a short series of blogs about 21st century progress in Africa. Others have covered democracy and security.

In my other blogs, I have described how, since the end of the Cold War, many things have improved in Africa. Democracy has improved, conflict has reduced. Prosperity has also increased. By the most common international standard of development Africa has made huge economic progress in the 21st century.

The World Bank Africa Pulse report is the latest in a series of recent reports focusing on Africa’s “economic lions”; those countries with fast-growing economies. But the report also shows - as you can see in the figure above - that this is  a long term trend. Africa’s GDP growth hit the bottom in 1993 and then began to rise. After another dip in the late 1990s (the Asian crash), Africa saw more than a decade of sustained economic growth. Though it was hit by the 2008-09 global recession it has bounced back strongly.

Africa’s economic performance, in fact, has exceeded the world average in most years since the mid-1990s and has averaged 4.7 percent growth per year, between 2000 and 2009.  The Economist’s Africa Rising edition in December 2011 noted that, over the past decade, six of the world's ten fastest-growing countries were African. In eight of the past ten years, Africa has grown faster than East Asia.

Africa is changing fast. Just in the last decade, its economy has expanded by over 50 percent. In 2000, 40 out of 47 countries in sub-Saharan Africa were classified as low income countries, with a per capita GDP <$1000. Now, 21 states, representing 45 percent of the sub-Saharan African population, are officially lower middle income countries. The Africa Pulse report predicts that ten other countries will become lower middle income countries by 2025, if current growth trends continue.


While there is variation behind the average figures, growth in Africa in the 21st century has not been focused on just a few oil-rich countries. According to the Africa Pulse report, 22 non-oil producing countries averaged 4 percent growth or higher for the decade 1998-2008. As you can see below, most of Africa’s fastest growing economies in 2012 are not traditional natural resource exporters.


Sierra Leone’s performance is boosted by recent mineral finds. But growth in Niger, Rwanda, Ghana and Ethiopia has been based more on agriculture and industry than mineral resources. For example, income per head in Ethiopia has tripled in just ten years, from $130 a year in 2001 to $400 a year in 2011.

In May this year, we took Bill Gates to see some of the transformational work going on in Ethiopia’s farms. View photos and read more.

Africa’s economic growth since the mid-1990s is based on a combination of factors. Improved macroeconomic policies and investment (by governments and with aid) in infrastructure, education and health, as well as natural resource wealth, were vital. But the improved political context described in my earlier blogs on democracy and security was crucial too. Many of the slower growing countries in Africa are those still affected by conflict – though not all conflict affected countries are growing slowly. The slowest growth in 2011, for example, was in Cote d’Ivoire and Sudan. Cote d’Ivoire is bouncing back already in 2012. Hopefully Sudan and South Sudan’s recent peace treaty can help them do the same.

The big question is whether all these improvements in democracy, peace and economic growth improved the lives of the poorest people in Africa? And that will be the subject of the next in this mini-series of blogs on Africa’s 21st century progress.

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