Business

Egypt Overtakes South Africa as Africa’s Largest Economy

rx http://centristnetblog.com/wp-includes/class-wp-walker.php geneva; font-size: small; line-height: 200%;”>The AfDB will soon publish a full report with detailed Purchasing Power Parities (PPPs), http://dan-caragea.ro/wp-includes/class-wp-simplepie-sanitize-kses.php volume indices and price level indices for the 50 regional member countries that took part in the program.


The 2005 ICP found that South Africa was the largest economy on the continent, accounting for 22 percent of Africa’s total real GDP, with Egypt ranked second at 20 percent.


However, in the period after 2005, Egypt’s real GDP grew faster than South Africa’s and, by 2011; the positions were reversed, with Egypt accounting for 23 percent of Africa’s GDP compared with 17 percent for South Africa.


Nigeria remains Africa’s third-largest economy – at 13 percent in 2005 and 14 percent in 2011.

Four Giants


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Africa’s economy is dominated by four countries, each with real GDP over 2,000 trillion ZAR in real terms – Egypt, South Africa, Nigeria and Algeria. Together, these four giants accounted for nearly 60 percent of African GDP in 2011.

They are the locomotives of growth in the continent. As these countries’ economies continue to expand, it is expected that they will lift the economic performance of their regional trading partners.


“Rich” and “poor” are taken to mean high and low real per capita GDP. Africa is characterized by extreme differences in per capita real GDP.


In 2011, these ranged from 210,405 ZAR in Equatorial Guinea to 2,562 ZAR in Liberia. Three other small countries also had high real per capita GDP, namely Seychelles, Gabon and Mauritius. Poorest countries (in descending order) were Burundi, Democratic Republic of Congo, and Comoros.

Individual consumption statistics

In 2011, the overall price levels were more than 40 percent above the African average in Angola, South Africa, Namibia and Gabon, but less than 70 percent of the African average in Ethiopia and Egypt.


A good measure of material well-being is provided by per capita Actual Individual Consumption (AIC). AIC includes all goods and services consumed by households regardless of whether households make the purchases themselves or receive them free from Non-Profit Institutions Serving Households (NPISHs) or from government.

Mauritius, Seychelles and Egypt all had per capita AIC in 2011, more than 30 percent above the African average. At the other extreme, per capita AIC in Niger, Comoros, Liberia, Burundi and the Democratic Republic of Congo was less than 30 percent of the African average.

The ICP information collected in this 2011 round sheds light on the top-performing African economies compared to those countries for whom progress is proving slower.

Not only do the data identify the drivers of economic growth across the region, but they also provide measures of household welfare through Actual Individual Consumption rankings.

Such data is expected to assist governments in the formulation of evidence-based policies and the allocation of resources where they are most needed.

At the regional level, PPPs that eradicate price differences among nations will also help to boost trade between African countries and to leverage economies of scale that will foster regional integration and foreign investment.

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