Exploring Wealth: The Richest Countries in Africa Ranked by GDP
When you think of the richest countries in Africa, what comes to mind? The gold mines of Mali? The pyramids of Egypt?
Western nations often think of the entire African continent as poor, thanks, in large part, to the legacies of the transatlantic slave trade and European colonialism. The truth is, many African countries were wealthy before colonization. By some estimates, African king Mansa Musa was the richest person in history .
Mansa Musa’s riches came from gold and salt distributed along trans-Saharan trade routes. “On the heels of this gold and salt trade come all these different commodities: glass beads, glass vessel ware, books, textiles, spices, enslaved people,” says Dr. Kathleen Bickford Berzock, the associate director of curatorial affairs at Northwestern University’s Block Museum, where she curated the exhibit Caravans of Gold. “It’s a very complex economy that developed out of this essential trade of gold for salt.”
Today, the wealthiest countries in Africa are more likely to produce crude oil than gold and salt.
Challenges of Determining the Richest African Countries
Ranking the richest countries in a region is surprisingly tricky. Gross domestic product (GDP) is the most popular method to measure a country’s wealth.
According to Tim Callen, former Assistant Director in the International Monetary Fund’s Communication Department, “GDP measures the monetary value of final goods and services — that is, those that are bought by the final user — produced in a country in a given period of time.”
Purchasing power parity (PPP) converts GDP to international dollars, which represent the purchasing power of the U.S. dollar in the United States. PPP allows economists to compare multiple countries’ economies.
But it’s still not a perfect measure: Larger countries with bigger populations have a GDP advantage, but does that make them “richer”? GDP per capita, which divides a nation’s GDP by its population, is one solution, but it comes with its own problems.
“The obvious flaw of GDP per capita is that it’s an average,” says Dirk Philipsen, an economics professor at Duke University. “If there are two people in a bar who each make $10,000 a year and then Bill Gates walks in, suddenly they each earn an average of hundreds of millions of dollars a year. In that sense, GDP per capita tells you absolutely nothing about the well-being of the individuals.”
Another metric is Gross National Income (GNI), which equals GDP plus income from foreign investment. GNI is a less popular metric than GDP, but it can be useful for countries with a lot of foreign business.
5 Richest Countries in Africa by GDP
Ethiopia is the birthplace of coffee, one of the world’s most important cash crops, and remains one of the world’s biggest coffee producers despite its small size.
According to the International Trade Administration (ITA), coffee is Ethiopia’s biggest export, accounting for more than a quarter of its export value (its next largest export is gold). Coffee is also important culturally: The traditional Ethiopian coffee ceremony is an hours-long friendship ritual.
Algeria’s status as Africa’s fourth largest economy is thanks to its hydrocarbon resources. Located in North Africa, Algeria stretches from the Mediterranean Sea into the Sahara Desert. According to the ITA, oil and natural gas account for over 95% of Algeria’s export revenue.
3. South Africa
South Africa is the third richest country in the continent in terms of GDP, but according to the ITA, it should be number one: “South Africa is the most advanced, diversified and productive economy in Africa,” it claims.
Sixty-nine percent of South Africa’s economy is tertiary, another word for postindustrial economic activities like trade, transport and services. (Primary economic activities include agriculture and mining wheras secondary economic activities include manufacturing.)
In 2010, South Africa became the first African nation to host the FIFA World Cup, a huge international vote of confidence for the country.
Nigeria is one of the world’s most populated countries, so while its overall GDP is high, GDP per capita is low. Additionally, Nigerians face ongoing insecurity — kidnappings in the northwest, terrorist insurgencies in the northeast and separatist conflict in the southeast, according to the World Bank.
As the World Bank puts it, “Despite having the largest economy and population in Africa, Nigeria offers limited opportunities to most of its citizens.”
According to the ITA, Nigeria is rich in natural resources, including oil (5.6 percent of GDP), minerals, and gemstones, but the largest contributor to the country’s GDP is the services sector (52 percent of GDP).
Egypt is internationally famous for its ancient pyramids full of treasure, but it also has the highest GDP in Africa. According to Britannica, Egypt’s biggest export is petroleum, but it has a diversified economy.
Farming is also important to Egypt’s economy. The agricultural industry accounts for 28 percent of jobs and 11.3 percent of GDP, per ITA — unsurprising, given the plow is an ancient Egyptian invention.
5 Richest Countries in Africa by GDP per Capita
5. South Africa
South Africa is the only country to make the continent’s top five richest nations in terms of both overall GDP and GDP per capita.
Gabon’s small population and abundance of natural resources including manganese, uranium, diamonds, gold and — most importantly — petroleum, are responsible for its high GDP per capita.
According to Britannica, the majority of Gabon’s national budget comes from petroleum production, more than half of which is from offshore drilling. (Gabon is located on the west coast of Africa, with a huge stretch of Atlantic Ocean coastline.)
3. Equatorial Guinea
Equatorial Guinea is a small country on the west coast of Africa, just north of Gabon. In the 1980s, the country’s economy shifted from one based on cacao, coffee and timber to one centered on petroleum, which accounts for roughly 80 percent of the country’s GDP, according to Britannica.
Despite Equatorial Guinea’s high per-capita GDP, wealth is not distributed evenly. According to Human Rights Watch, “Corruption, poverty and repression continue to plague Equatorial Guinea under President Teodoro Obiang Nguema Mbasogo, who has been in power since 1979. Vast oil revenues fund lavish lifestyles for the small elite surrounding the president, while a large proportion of the population continues to live in poverty.”
Botswana is a small, landlocked nation in southern Africa. Botswana’s stable democratic government and diamonds have helped the tiny African country see significant economic growth in the past several decades. Still, Botswana is one of the most unequal countries in the world, according to the World Bank.
Libya is Africa’s third largest oil producer, after Nigeria and Algeria, according to the U.S. Energy Information Administration (EIA). The country’s GDP is heavily reliant on oil and natural gas exports, which accounted for almost three-quarters of the country’s total value of exports in 2020, per EIA. Libya faces an ongoing civil war as rival groups fight for control of the country’s oil fields.