In the period between 2014 and 2015, CNN-Money tipped Nigeria to be the third fastest growing economy in the world. It came in at third place after China (7.3%) and Qatar (7.1%), which was no mean feat by any standard. South Africa is also one of Africa’s biggest economy although in recent years there has been no particularly good report to write home.
With that in mind, it comes as a shock that none of these two big economies in Africa featured anywhere among the top ten fastest growing economies in Africa as reported by International Monetary Fund (IMF). As outlined in the IMF’s World Economic Outlook for 2016 report.
The latest (April) revised report by the IMF places Cote d’Ivoire as the fastest growing economy in Africa with a GDP of 8.5%. Below is a breakdown of IMF’s World Economic Outlook for 2016 revised in April of the top ten fastest growing economies in Africa:
Why Africa’s top 4 Biggest Economies are underperforming
Known to be the largest economy in Africa, Nigeria is buckling under low international crude oil prices. The Nigerian government relies on oil revenues for up to 70% of its financing, and oil exports make up 90% of the country’s export earnings. With the slumping oil prices, Nigeria has virtually no room to adjust its country’s budgeting thus the slow growth.
Touted to be the most advanced economy in Africa, the IMF forecasts on SA’s GDP for the year 2016 is unimpressive 0.6%. In fact, SA is one of the slowest growing economies in Africa (yet Africa remains one of the fastest growing territories in the world).
SA’s currency the Rand has plummeted 30% over the last year, partly because of the political turmoil the country is experiencing under the leadership of President Jacob Zuma and the emerging market sell-off.
At one point, Angola rose to become Africa’s fastest growing economy, but now the country is virtually on its knees asking for IMF help. As the second biggest oil producer in Africa after Nigeria, oil exports makes up to 95% revenue for the government.
Last year, Angola debuted on the international debt market, and now it is struggling to meet its national budget and debt obligations. It is currently seeking IMF’s monetary support. Additionally, the country has bound money-for-oil deals with China, using its oil resources as collateral to the loans from China. This action is further squeezing the country’s sources of revenue.
Kenya’s economy is largely resilient and diversified, although there is potential trouble brewing up in the banking sector. Two banks failed last year, and the third one has just been forced into receivership to the lender of last resort in April 2016.
There are also reports that a fourth bank is currently under investigation, and experts say that consolidation inevitable.