Economic indices are one of the indicators used to determine how great a country is. The ability of a country to muster and sustain financial power and translate that into economic prosperity for its citizens only propels accelerated growth and development for that state. The level of wealth created by citizens, businesses, and corporations in areas where they are domiciled goes a long way to deducing which entities are the richest countries in their regions and the world.
Over the years, many business, economic and political analysts have decided and ranked countries based on the strength of their Gross Development Product (GDP) per capita. While it serves as competent and practical data to measure the standard of living of citizens in a country, the GDP is imperfect to determine a country’s wealth. This is because the GDP does not account for all of the wealth generated by that nation.
Therefore, this piece will utilise the national net worth as its parameter in determining the richest countries in Africa and the world. The national net worth is the total sum of the value of a country’s assets minus its liabilities. A country’s ability to take on debt and sustain spending can be properly assessed and evaluated through this data.
Top five richest countries in Africa
Africa is the second-largest and second-most-populous continent in the world. The continent accounts for 16 per cent of the global human population, according to a 2019 estimate by the United Nations.
It has a large repertoire of mineral and natural resources and human capital scattered across the 54 countries, eight territories, and two non-recognised independent states that make up the continent. In recent years, there has been an economic expansion and wealth generation for African countries following an increase in the types of services offered, the introduction of technology to aid business and the establishment of technological start-ups, the exponential growth of its entertainment industry, and the visitation of attraction spots courtesy of tourism.
With this in mind, we present a list of the five richest countries in Africa in descending order, using the national net worth list compiled by Credit Suisse, a globally renowned investment bank and financial services firm.
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Morocco
World ranking: 60 | Estimated total wealth: $332 billion | Wealth to GDP ratio: 2.548 (*World Bank)
Located in North Africa, Morocco is considered a relatively liberal economy. Although it may still be practising the monarchial system of government, its economy is open to the world.
Morocco is heavily dependent on agriculture, accounting for around 14 per cent of GDP and employing about 45 per cent of the population. Its services sector accounts for just over half of its GDP. Being close to Europe, Morocco also rakes in substantial revenue from tourism. Its industry sector also contributes to the country’s economy.
The major fuelers of the country’s economy are agriculture, phosphate minerals (the world’s third-largest producer of phosphates), and tourism.
It is highly dependent on imports to sustain its economy and also has a high unemployment rate and mounting debt. However, following economic reforms, the Moroccan economy is much more robust than just a few years ago.
Kenya
World ranking: 59 | Estimated total wealth: $338 billion | Wealth to GDP ratio: 2.607 (*World Bank)
Kenya is largely a market-based economy, with the forces of demand and supply majorly determining economic activities. Like Morocco, Kenya opens its economy to all investors worldwide.
Agriculture is the largest contributor to Kenya’s GDP. Almost 75 per cent of working Kenyans are estimated to earn their living by farming, making it the most important economic sector in Kenya. Forestry and fishing are also major revenue earners in the agric sector of the country.
Its economy is also boosted by its well-developed social and physical infrastructure, which attracts foreigners, particularly western businesses, to set up shop there. The infrastructure boom has led to expansions in the telecommunications sector, with many tech companies establishing their presence in the East African country. A major fruit of this development is the high level of IT literacy and innovation among the youth.
The Kenyan economy also thrives thanks to the transport and construction sectors and the rise of small and medium businesses in the country within its tax net. Its industry and services sectors and tourism are also active contributors to its GDP.
However, poor governance and corruption have negatively affected economic growth. Also, the issue of insecurity has hampered tourism and new opportunities for foreign investment, as Kenya is occasionally rocked by terrorist attacks conducted by Al-Shabbab, which are in neighbouring Somalia.
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Nigeria
World ranking: 49 | Estimated total wealth: $619 billion | Wealth to GDP ratio: 0.989 (*World Bank)
Often called the “Giant of Africa,” Nigeria operates a mixed economy as thriving private entities run alongside state interventionism. In other words, this West African country’s economy is a blend of capitalism and socialism.
Nigeria is said to have the largest economy on the continent, and this can be attributed to the huge deposit of crude oil that it has. The country is the 14th largest oil producer in the world as it is estimated to produce about 1.5 billion barrel litres of oil per day. It is the major source of income for the government as a result of its export, and it contributes about nine per cent to the country’s GDP.
The country is also dependent on agriculture for more internal consumption than exports, which it achieved in huge numbers in the early years of post-independence. However, following recent policy reforms, including the ban on the importation of certain foods and the provision of credit facilities to farmers, the country is on the path to becoming food sufficient again. Despite its struggles, agriculture contributes a sizeable chunk to its GDP.
Asides from oil and other natural resources, the major sustainer of the country’s economy are its services sector: financial, communications, technology, and entertainment. According to Bloomberg, Nigeria ranks 27th worldwide and first in Africa in services output. The country is the largest financial market in Africa, has a robust telecommunications market that ranks seventh in the absolute number of mobile phones and contributes an average of 12.45 per cent to the country’s GDP, and has a movie and music sub-sectors generating millions of Naira in terms of cinema tickets, sales, and streaming.
The industry sector, particularly manufacturing, is also a big revenue earner for the country. For example, Nigeria produces a significant proportion of goods and services for the West African region and even for the African market. In addition, a major source of foreign exchange earnings for Nigeria is remittances sent home by Nigerians in the diaspora.
However, the challenges debilitating the economy include corruption, unstable policies, unemployment, inflation, the failure to capture the booming informal sector into the tax net, and insecurity (which has hampered agriculture in Northern Nigeria).
South Africa
World ranking: 43 | Estimated total wealth: $763 billion | Wealth to GDP ratio: 2.191 (*World Bank)
Even though it was shackled for years due to apartheid, South Africa has bounced back and is considered by business and economic analysts as the most industrialised and technologically-advanced country on the African continent. The country operates a largely market-based economy but with sprinkles of state interventionism.
Its natural resource extraction industry is the most dominant sector of the economy, contributing about $13.5 billion annually. The country is endowed with platinum, chromium, manganese, titanium, gold, vanadium, iron ore, and uranium; all in large quantities. The presence of these resources has led to mining, which is the dominant extractive sub-sector in the country. Mining represents almost 60 per cent of the country’s exports.
As a result of the diversification of its economy, services are also a major contributor to South Africa’s economy. The financial industry is a big revenue earner for the country. Financial institutions in the country managed more than $1.41 trillion in assets as of 2021. It is, therefore, not surprising that the Johannesburg Stock Exchange (JSE) is the biggest on the continent, with its total market capitalisation standing at $1.28 trillion as of 2021.
The country is also considered to have the fourth most advanced mobile telecommunications network worldwide, following the massive investment made by the government and telecom companies. It also rakes in money through tourism.
South Africa has a growing middle-class population, although the distribution of wealth is heavily skewed between the blacks and whites in the country. Its informal sector contributes an estimated eight per cent of the country’s GDP. However, its high unemployment rate, restrictive labour regulations, excessive government bureaucracy, and political corruption are hindrances to its economy.
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Egypt
World ranking: 34 | Estimated total wealth: $1,159 billion | Wealth to GDP ratio: 2.963 (*World Bank)
Egypt is the wealthiest country in Africa. Following a range of economic reforms, Egypt is transitioning from a state-controlled economy to a market-oriented economy. As part of the reforms, the country has reduced many price controls, subsidies, and inflation, cut taxes, and partially liberalized trade and investment.
The North African country is replete with mineral and energy resources such as petroleum, natural gas, phosphates, gold, and iron ore. Out of the mentioned resources, crude oil and gas are key exports and generate huge revenues for the country. It also earns substantial income from trade, particularly with the export of ready-made clothes, cotton textiles, medical products, fruits, food (onion), cement, and steel.
Egypt is also a major agricultural power on the continent, thanks to plentiful water from the River Nile, which is used for irrigation and good soil. The main crops produced include cotton, rice, corn, sugarcane, wheat, sugar beets, onions, tobacco, and beans. It also has a prosperous automobile industry that employs a large number of Egyptians, with the state-owned automobile company being the major player alongside other private automobile manufacturers.
The country is one of the few countries that are self-sufficient concerning electricity, has very robust publishing and broadcasting industry, which is considered to be the largest in the Middle East and North Africa, and its tourism industry is one of the most important sectors in the economy, especially in terms of employment and foreign exchange.
Just like other African countries, Egypt has a high poverty rate and is beset by corruption, ineffective policies, and unemployment.
Top five richest countries in the world
The richest countries in the world are majorly industrialised countries, which enjoy a high quality of life, the standard of living, developed economy, and advanced technological infrastructure. They also have a good GDP, Gross National Product (GNP), level of industrialization, and infrastructure.
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The top five richest countries, in descending order, are:
United Kingdom
World ranking: 5 | Estimated total wealth: $15,284 billion | Wealth to GDP ratio: 5.069 (*World Bank)
The United Kingdom consists of four countries– England, Scotland, Wales, and Northern Ireland. It is a market-oriented and social market economy. Its economy, as of 2021, stood at $3.19 trillion.
The service sector dominates the economy, contributing 81 per cent of the GDP. Of the world’s 500 largest companies, 26 of them are headquartered in the UK.
Germany
World ranking: 4 | Estimated total wealth: $18,274 billion | Wealth to GDP ratio: 3.797 (*World Bank)
Germany is the second-most populous nation and the seventh-largest country in Europe. It is the largest national economy in Europe and operates a highly developed social market economy (a blend of capitalist market features and state social policies and regulations).
The country is one of the largest exporters globally, as it is said to account for 41 per cent of national output. The services sector is the economy’s dominant sector, with a 70 per cent contribution to the total GDP, while industry contributes 29.1 per cent. It is also the largest manufacturing economy in Europe and the world’s top location for trade fairs.
Japan
World ranking: 3 | Estimated total wealth: $29,631 billion | Wealth to GDP ratio: 4,918 (*World Bank)
Japan is the 11th most populous nation in the world and is among the most urbanised nations. It operates a free-market economy and is considered the world’s second-largest developed economy.
Japan is the world’s largest creditor nation, the world’s second-largest automobile manufacturing country, and the world’s fourth-largest consumer market. The Japan Exchange Group is the world’s fifth-largest stock exchange by market capitalisation.
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China
World ranking: 2 | Estimated total wealth: $77,884 billion | Wealth to GDP ratio: 4,470 (*World Bank)
Situated in East Asia, China is the most populous nation on the planet. Its economic system is heavily based on the social market economy, with the government, at times, attempting to allow a modicum of market-oriented economy features. There is a large number of state-owned enterprises (SOEs) alongside mixed ownership enterprises and private businesses.
It has the world’s fastest-growing major economy and four of the world’s top ten most competitive financial centres (Shanghai, Hong Kong, Beijing, and Shenzhen) and also has three of the world’s ten largest stock exchanges. It is the world’s largest manufacturing economy and exporter of goods and also the world’s fastest-growing consumer market.
United States of America
World ranking: 1 | Estimated total wealth: $126,340 billion | Wealth to GDP ratio: 4,945 (*World Bank)
Located in North America, the United States is the richest country in the world. It operates a full market economy, and its GDP of $22.7 trillion constitutes 24 per cent of the gross world product at market exchange rates, according to the International Monetary Fund (IMF). It is the largest importer of goods and second-largest exporter globally.
The public sector is the leading field of employment in the country, while the private sector constitutes the largest chunk of the economy. The US is also the most technologically powerful and innovative economy in the world. Its currency, the US dollar, is the world’s most used currency for international transactions and is also the world’s foremost reserve currency. Its two major stock exchanges – the New York Stock Exchange and the Nasdaq – are the world’s largest stock exchanges by market capitalization and trade volume.
The US is also the world’s largest producer of petroleum and natural gas and has 121 of the world’s 500 largest companies headquartered there. Wealth is highly concentrated, as the bottom 50 per cent of Americans only share two per cent of total household wealth while the top one per cent holds 35 per cent of that wealth. The majority of that one per cent are billionaires as the US has the world’s highest number of billionaires, with an estimated total wealth of $3.0 trillion.
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