Market News

BY  Chinedu Okafor

When seen as a gauge of the compound annual growth rate, GDP for African countries, or any country at all is a crucial sign of that nation's economic health.

• Business Insider Africa presents the top 10 African countries with the lowest GDP growth rate in the last decade.
• This list is courtesy of World Economics.
• Sudan ranks number 1 on the list.

Economic stagnation is frequently directly indicated by a low GDP CAGR.

It implies that an economy is expanding more slowly than is required to satisfy the needs of its citizens or to compete in the global economy.

Limited innovation, the emergence of few new sectors, and a lack of economic dynamism are common in economies with low GDP growth.

Over time, this stagnation may solidify, resulting in persistent underperformance and fewer possibilities for both firms and individuals.

Increased underemployment or greater unemployment rates are usually the results of slow GDP growth.

Slow economic growth makes it impossible to provide enough employment to support an expanding population or to transfer people to more lucrative, productive industries.

This creates a vicious loop in many emerging countries, where individuals are forced to continue working in low-paying or informal professions due to a lack of fresh employment options, which furthers inequality and poverty.

Furthermore, countries with low GDP CAGRs sometimes struggle to attract both local and international investment.

Investors prefer to avoid economies with low growth since the opportunities for financial gains are restricted.

Top 10 African countries and their contribution to Africa’s GDP

This lack of investment stifles innovation, inhibits infrastructure development, and impedes the emergence of new sectors.

In some situations, a stagnating economy can lead to capital flight, in which both domestic and international investors withdraw their funds from the country, compounding economic issues.

ADVERTISEMENT

With that said, here are the African countries with the highest “Compound Annual Growth Rates (CAGR) according to World Economics, which derives the CAGR GDP from GDP Data in Purchasing Power Parity terms with added estimates for the size of the informal economy and adjustments for out-of-date GDP base year data.

The GDP Data has been developed by World Economics using World Bank PPP data, IMF growth rates, and World Economics research into base year uplifts and the informal economy size.”

Top 10 African countries with the lowest GDP growth rate in the last decade