The economy of Africa consists of the trade, industry, agriculture, and human resources of the continent. As of 2012, approximately 1.07 billion people were living in 54 different countries in Africa. Africa is a resource-rich continent.Recent growth has been due to growth in sales in commodities, services, and manufacturing. Sub-Saharan Africa, in particular, is expected to reach a GDP of $29 trillion by 2050.
In March 2013, Africa was identified as the world’s poorest inhabited continent; however, the World Bank expects that most African countries will reach “middle income” status (defined as at least US$1,000 per person a year) by 2025 if current growth rates continue. In 2013, Africa was the world’s fastest-growing continent at 5.6% a year, and GDP is expected to rise by an average of over 6% a year between 2013 and 2023. Growth has been present throughout the continent, with over one-third of Sub-Saharan African countries posting 6% or higher growth rates, and another 40% growing between 4% to 6% per year. Several international business observers have also named Africa as the future economic growth engine of the world.
Africa’s economy was diverse, driven by extensive trade routes that developed between cities and kingdoms. Some trade routes were overland, some involved navigating rivers, still others developed around port cities. Large African empires became wealthy due to their trade networks, for example Ancient Egypt, Nubia, Mali, Ashanti, and the Oyo Empire.
Some parts of Africa had close trade relationships with Arab kingdoms, and by the time of the Ottoman Empire, Africans had begun converting to Islam in large numbers. This development, along with the economic potential in finding a trade route to the Indian Ocean, brought the Portuguese to sub-Saharan Africa as an imperial force. Colonial interests created new industries to feed European appetites for goods such as palm oil, rubber, cotton, precious metals, spices and other goods.
Following the independence of African countries during the 20th century, economic, political and social upheaval consumed much of the continent. An economic rebound among some countries has been evident in recent years, however.
The dawn of the African economic boom (which is in place since 2000’s) was similar to the Chinese economic boom that had emerged in Asia since late 1970’s. Currently, South Africa and Nigeria ranks among the continent’s largest economies, with Egypt economically scrambling and suffering from the recent political turmoil. Equatorial Guinea possessed Africa’s highest GDP per capita albeit allegations of human rights violations. Oil-rich countries such as Algeria, Libya and Gabon, and mineral-rich Botswana emerged among the top economies since the 21st century, while Zimbabwe and the Democratic Republic of Congo, potentially among the world’s richest nations, have sunk into the list of the world’s poorest nations due to pervasive political corruption, warfare and braindrain of workforce. Botswana remains the site of Africa’s longest and one of the world’s longest periods of economic boom (1966–1999).
In the past ten years, growth in Africa has surpassed that of East Asia Data suggest parts of the continent are now experiencing fast growth, thanks to their resources and increasing political stability and ‘has steadily increased levels of peacefulness since 2007’. The World Bank reports the economy of Sub-Saharan African countries grew at rates that match or surpass global rates.
The economies of the fastest growing African nations experienced growth significantly above the global average rates. The top nations in 2007 include Mauritania with growth at 19.8%, Angola at 17.6%, Sudan at 9.6%, Mozambique at 7.9% and Malawi at 7.8%. Other fast growers include Rwanda, Mozambique, Chad, Niger, Burkina Faso, Ethiopia. Nonetheless, growth has been dismal, negative or sluggish in many parts of Africa including Zimbabwe, the Democratic Republic of the Congo, the Republic of the Congo and Burundi. Many international agencies are increasingly interested in investing in emerging African economies. especially as Africa continues to maintain high economic growth despite current global economic recession. The rate of return on investment in Africa is currently the highest in the developing world.
Debt relief is being addressed by some international institutions in the interests of supporting economic development in Africa. In 1996, the UN sponsored the Heavily Indebted Poor Countries (HIPC) initiative, subsequently taken up by the IMF, World Bank and the African Development Fund (AfDF) in the form of the Multilateral Debt Relief Initiative (MDRI). As of 2013, the initiative has given partial debt relief to 30 African countries.