Africa’s biggest economies responsible for continent’s slow economic growth – Report
The largest three economies by GDP in Africa have witnessed slow economic growth between 2010 and 2019.
Smaller economies on the continent have witnessed consistent economic growth. Although the report noted that the biggest economies will drive the desired growth needed in the country.
The report further noted that the service industry has grown consistently over the past two decades more than agriculture and industry.
Nigeria, South Africa and Egypt- the three biggest economies in Africa contributed significantly to the continent’s slow pace of economic growth in the decade between 2010 and 2019.
This is according to a report by McKinsey Global Institute titled Reimagining Economic Growth in Africa: Turning Diversity into Opportunities.
According to the report, there is a wide variation of economic growth in the continent. While some countries have experienced consistent economic growth, others have seen recent setbacks in growth. The continent’s three biggest economies fell into categories the report tagged “recent slowdown” or “slow growers”.
Egypt and Nigeria who had an average GDP growth rate of 4.8% and 7.9% r respectively between 2000 and 2010 have seen average growth rate shrink to 3.6% for Egypt and 3.1% for Nigeria in the decade between 2010 and 2019. South Africa- the continent’s third super economy fell into the “slow growers” category.
The country had an average GDP growth rate of 3.5% in the first decade of the millennium and 1.6% for the decade between 2010 and 2019.
African countries had a consistent GDP growth rate between 2000 and 2019.
On the other hand, the smaller countries on the continent have experienced consistent economic growth. Countries like Ethiopia, Ghana, Uganda, Zambia etc. have grown their GDP consistently grow in the years between 2000 and 2019. They have averaged around 4.2% economic growth in the first two decades of this century.
The report noted that “Almost half of Africa’s people live in countries where GDP growth between 2010 and 2019 exceeded the continent’s average growth rate of 4.2 per cent since 2000. These countries, which fall into clusters we call “consistent growers” and “recent accelerators,” were largely midsize economies that benefited from higher-than-average increases in investment, exports, and urbanization, which increased productivity. These countries offer valuable models for the continent to emulate.
The other half of the African population lives in countries that grew more slowly over the past decade, including the continent’s three largest economies—Egypt, Nigeria, and South Africa—as well as ten of the smallest countries on the continent
Together, those countries, which fall into our “recent slowdown” and “slow growers” clusters, accounted for almost 75 per cent of the continent’s GDP in 2019. Increasing their productivity is imperative to restoring Africa’s economic vitality.”
Further analysis of sectors witnessing huge growth in Africa.
The report also delved into the structure of Africa’s economy and the industries driving growth. According to the study, the service industry has seen more growth in jobs and contribution to the continent’s economy when compared to agriculture and industry.
It went further to say,
“The African economy has undergone a profound structural shift to services over the past 20 years, as people left work in the fields to take jobs in trade and other services in cities. Reflecting that shift, employment in services increased from 30 per cent to 39 per cent over that period, although in 2019, half the African workforce remained in agriculture.”
Full Story: https://nairametrics.com/2023/06/10/africas-biggest-economies-responsible-for-continents-slow-economic-growth_-report/
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