The economy of Africa currently holds one of the largest growth opportunities for companies looking to expand their global presence. As the second most populous continent with a rapidly growing population, where 41% of the African population is under the age of 15, the economy of Africa is set to reach $29 trillion by 2050.
This economic overview will give you a snapshot of the African economy. As a manager at a multinational firm, this article serves as a quick guide to allow you to assess the African economy. This ability to understand and compare Africa’s economic standing to other continents will ultimately help your company build a strong profile of the African market.
An Overview of the Economy of Africa:
The current economic standing of Africa is as follows
Information on Africa’s major sectors is as follows:
- Energy (hydroelectric, petroleum and gas, coal production, uranium production, as well as solar and geothermal energy)
- Infrastructure (production and transportation of power, roadways, and telecommunications)
- Mining and Drilling
- Manufacturing & Consumer Goods
- Banking & Financial Services
Trade is a very important part of the economy of Africa.
Africa’s major imports and exports are as follows:
- Major exports:
– Palm oil,
– Gold and diamonds,
– Precious metals.
- Major Imports:
– Industrial Goods: Machinery and equipment,
– Consumer Goods: Apparel, Processed Foods
– Petroleum products,
– Scientific instruments,
– Automotives & Motor spare parts.
The countries Sub-Saharan Africa trade with the most are as follows
- Main export trade partners of Sub-Saharan Africa (2016) (Source):
– China (7.8%)
– India (5.89 %)
– United States (5.8 %)
– Germany (5%)
- Main import trade partners of Sub-saharan Africa (2016) (Source):
– China (17.5%)
– Germany (6.7%)
– India (5.7%)
– United States (5.7%)
Ease of Doing Business
According to the World Bank, the economy of Africa shows a wide range in rank in regards to how easy it is to conduct business in different African countries. (Source).
Mauritius is best in Africa ranked at 25th (in the world), while Somalia is ranked the last place at 190th (out of 190 countries).
This ranking is based on a scoring system comprising of ten different topics, which include starting a business, dealing with construction permits, getting electricity, etc.
The table below shows the ranking of the ease of doing business in different African countries:
- Foreign Direct Investment: $42 billion (2017) (Source)
- Diaspora remittance to Sub-Saharan Africa: $37.8 billion (2017) (Source)
- Exchanges: There are 29 exchanges in Africa, representing 38 nations’ capital markets. The table below lists all capital exchanges in Africa (Source)