The Fastest Growing Economy In Africa 2020: According to the African Development Bank, for the first time in a decade, investment expenditure rather than consumption accounts for more than half of GDP growth.
Africa’s economic growth remained slightly stable in 2020 at 3.9 percent and is on course to pick up to 4.1 percent in 2021.
Africa Facts Zone presents the fastest growing economy in Africa 2020. The top performers are Rwanda, Ethiopia Côte d’Ivoire, Ghana, Tanzania & Benin.
Rwanda is the fastest growing economy in sub-Saharan Africa with a Gross Domestic Product of 8.7% this year, followed by Ethiopia (7.4 per cent), Côte d’Ivoire (7.4 per cent), Ghana (7.1 per cent), Tanzania (6.8 per cent) & Benin 6.7 per cent.
Fastest Growing Economy In Africa 2020 Forecast
According to the report, Africa’s economic growth is forecast to rise to about 4 per cent this year driven by infrastructure investments and natural resource exports.
While these countries Rwanda, Ethiopia Côte d’Ivoire, Ghana, Tanzania & Benin help push up Africa’s overall average economic growth rate forecast to 3.8% (or 3.6% for Sub Saharan Africa), these averages are weighed down closer to the global average (3.4%) by the two largest economies, Nigeria (2.5%) and South Africa (1.1%).
East Africa maintained its lead as the continent’s fastest-growing regions, predicted with an average growth estimated at five per cent in 2019; North Africa was the second-fastest, at 4.1 per cent, while West Africa’s growth rose to 3.7 per cent in 2019, up from 3.4 per cent the year before.
Central Africa grew at 3.2 percent in 2019, up from 2.7 percent in 2018, while Southern Africa’s growth slowed considerably over the same period, from 1.2 percent to 0.7 percent, dragged down by the devastating cyclones Idai and Kenneth.
Overall, the forecast described the continent’s growth fundamentals as improved, driven by a gradual shift toward investments and net exports, and away from private consumption.
Urgent Call To Address Africa’s Education & Skills Mismatch
The 2020 AEO, themed Developing Africa’s workforce for the future, calls for swift action to address human capital development in African countries, where the quantity and quality of human capital is much lower than in other regions of the world.
The report also noted the urgent need for capacity building and offers several policy recommendations, which include that states invest more in education and infrastructure to reap the highest returns in long-term GDP growth. Developing a demand-driven productive workforce to meet industry needs, is another essential requirement.
“Africa needs to build skills in information and communication technology and in science, technology, engineering, and mathematics. The Fourth Industrial Revolution will place increasing demands on educational systems that are producing graduates versed in these skills,” the report noted.
To keep the current level of unemployment constant, Africa needs to create 12 million jobs every year, according to the report. With rapid technological change expected to disrupt labour markets further, it is urgent that countries address fundamental bottlenecks to creating human capital, the report said.
“Youth unemployment must be given top priority. With 12 million graduates entering the labour market each year and only 3 million of them getting jobs, the mountain of youth unemployment is rising annually,” said Akinwumi Adesina, African Development Bank President, who unveiled the report.
“Let’s look at the real lives beyond the statistics. Let’s hear their voices, let’s feel their aspirations.”
Although many countries experienced strong growth indicators, relatively few posted significant declines in extreme poverty and inequality, which remain higher than in other regions of the world.
Essentially, inclusive growth — registering faster average consumption for the poor and lower inequality between different population segments — occurred in only 18 of 48 African countries with data.
“As we enter a new decade, the African Development Bank looks to our people. Africa is blessed with resources but its future lies in its people…education is the great equaliser. Only by developing our workforce will we make a dent in poverty, close the income gap between rich and poor, and adopt new technologies to create jobs in knowledge-intensive sectors,” said Hanan Morsy, Director of the Macroeconomic Policy, Forecasting and Research Department at the Bank.