Why Egypt’s Economy Could Be Larger Than Nigeria’s

In the last decade the gross domestic product of the 11 largest countries in sub-Saharan Africa has grown 51 percent — more than double the world average of 23 percent and four times that of the U.S., according to Bloomberg.

The continent’s average consumer price index has stayed at 8 percent since 2013 compared to 13 percent plus in 2008 — a combination of rapid economic expansion and low inflation that has enticed investors as other once-favored emerging markets struggle.

The major drivers in Africa were consumer-focused industries that are taking advantage of the burgeoning population, materials (construction) and financial services, which outpaced emerging markets by 11 percent.

Only energy was the main loser. Yet the struggles of major exporters such as Angola and Nigeria have been conflated with the reduced demand by China for commodities to paint a dire outlook for the continent.

The picture is nowhere as bad as persistently advanced, says Carlos Lopes, executive secretary of the U.N. Economic Commission for Africa. Most African countries are not important exporters of commodities, and it is difficult to predict just how the downturn will actually hurt Africa’s growth.

There is actually a benefit to the downturn: the current market volatility could accelerate the drive to turn the continent’s attention towards seeking internal and more sustainable growth.

A counter-argument to the rapid expansion of GDP has been that data on Africa’s growth is weak. It definitely is, but it presents a different “problem”: that of undercounting.

Compelling data from the international economics analysis organisation World Economics shows how in four ways: