According to an October 2012 report by Standard Chartered Research, Nigeria’s challenge is to replicate its success in technology (mobile telephony) in the utilities, refining, and agricultural sectors. The report urges Nigeria to move away from the “system of patronage” that has held the country back for decades. It also calls for greater emphasis on diversification and long-term planning that will change Nigeria from an “allocation” to a “production” state. The report states that, “Oil and gas, even given Nigeria’s vast resources, are not going to determine development in the future.”
Nonetheless, there is a great deal of optimism surrounding Nigeria. The Economist even suggested recently that Nigeria’s economy, messy as it still is, has the potential to overtake South Africa within a few years.
3. Angola: A China-Fueled Surge
Angola is sub-Saharan Africa’s third-largest economy after South Africa and Nigeria, with a GDP of $107 billion and per capita income of $8,200. Since the end of the civil war in 2002, Angola’s economy has been growing much faster than the continent’s two powerhouses, and the World Bank recently reclassified it as an Upper-Middle-Income economy. Unlike South Africa, however, Angola has a young economy that lacks diversification. And the country is still recovering from that 27-year-long civil war, which devastated its economy and people.
Angola is the continent’s second largest exporter of oil. Its economy was expanding at a rate of 15 % before the global recession of 2009. Despite the current contraction, its economy is still expected to expand by 6.8 % this year thanks to the export of oil and diamonds, as well as uranium, iron ore, gold, and copper. (Most of Angola’s oil goes to China; Angola is China’s biggest trading partner on the continent.)
Since the end of the war, Angola’s civilian government has instituted aggressive economic and social reforms that are beginning to bear fruit, and it claims to have reduced poverty from 68 % to 39 % over the last decade. It has also asserted an infrastructure development program to build thousands of miles of roads and railroads, and hundreds of bridges and reconstructed airports. Most of these infrastructure projects involve Chinese firms under an oil-for-infrastructure deal that some criticize as favoring China.
4. Ghana: Africa’s Next Economic Star?
Another emerging African “lion” is West Africa’s Ghana, which is still classified as a Lower-Middle-Income country by the World Bank. Its economy grew at 14.3% in 2011, making it one of the fastest-growing economies in the world (and tops on the African continent), though the World Bank expects its growth to slow to 7.5 % for 2012.
Ghana’s growth can largely be attributed to increased oil production, although diamond, iron ore, and cocoa exports also contributed to the bottom line. After decades of mismanagement, Ghana began to turn its economy around in the early 1990s, when it instituted wide-ranging economic reforms with the support of the IMF and World Bank. In 2007, oil was discovered, which led to faster economic growth. Today, Ghana has been a stable democracy since 1992, and is considered a model for prudent political and economic reform.
5. Ethiopia: Public Sector Investment