According to the IMF, faster GDP growth in Angola and Ethiopia pushes Kenya to fifth place in sub-Saharan Africa’s economic rankings. Nigeria is projected to remain the continent’s largest economy, but Angola’s return to growth, linked to higher oil prices, saw the country overtake Kenya last year, ending years of recession.
Ethiopia, on the other hand, is set to overtake Kenya in fourth place this year, continuing ambitious economic reform efforts aimed at easing armed conflict in the country and opening up one of Africa’s fastest-growing but most closed economies.
The IMF expects the economies of Ethiopia and Angola to expand by 13.5 percent and 8.6 percent, respectively, in dollar terms this year. However, Kenya is expected to record a slower growth of 2.4 per cent during the review period as the country grapples with the aftershocks of the Covid-19 pandemic, drought, electoral jitters and the disruption of global supply chains by the Russia-Ukraine war.
It is worth noting that Kenya’s relegation to fifth position weakens its hand in the race for foreign direct investment (FDI), which is crucial in easing the continent’s growing youth unemployment. So far, South Africa and Ethiopia have fared better than Kenya in attracting foreign investment, with investors looking at populations with more money to spend. The IMF projects that Kenya’s GDP will reach $117.6 billion this year, behind Nigeria ($574 billion), South Africa ($422 billion), Angola ($135 billion) and Ethiopia ($126.2 billion).
Multinational companies are increasingly interested in Africa as a market with many opportunities, from mobile phones, cars, food and clothing to financial services and entertainment, as millions of Africans seek to escape widespread poverty.
Oil-rich Angola will regain its third place, which it lost to Kenya in 2020 after years of contraction due to a drop in oil prices. According to OPEC, Angola is the continent’s second-largest oil producer after Nigeria, while data from the Kimberley Process ranks it as the world’s seventh-largest producer of rough diamonds. After five years of recession, Angola’s GDP will grow by 0.7 percent in 2021, according to the World Bank.