Resource-poor African countries set to outperform resource-rich nations
Statistics from a recent report, show that African countries with little to no resources will outperform African countries with more abundant resources.
The report also notes that the growth disparity between non-resource-abundant and resource-abundant countries will continue to widen. This juxtaposes the forecast that Sub-Saharan African nations will see faster development in 2024.
The perception that resource riches are a necessary condition for economic prosperity in Africa is being called into question by the rise of non-resource-rich nations as catalysts for economic growth and development. The prosperity of nations lacking substantial resources is mostly driven by variables such as diversification, human capital investment, effective governance, and regional integration.
These nations are positioned to set the standard for sustainable and equitable growth in Africa as the continent continues its economic transformation path, proving that one need not rely entirely on natural resource endowments to achieve prosperity.
A report by the World Bank titled “Addressing Inequality to Revitalize Growth and Alleviate Poverty in Africa,” highlights this fact as it forecasts that African countries with fewer to no resources are set to outperform countries on the continent with vast resources.
According to the report, not only are non-resource-rich African countries set to experience more growth, but the disparity between them and the resource-rich countries is set to widen.
“Declining international commodity prices from their 2022 peaks are expected to weigh on exports for resource-abundant countries. Still, this group of countries will grow from 2.2 percent in 2023 to 2.8 percent in 2024 as hydrocarbon projects resume or come online in Niger and Senegal and mining production kicks off in the Democratic Republic of Congo, Mali, and Sierra Leone,” the report reads.
The report shows that compared to the growth of resource-abundant countries which is set to go from 2.2% to 2.8%, a 0,6% growth, the growth of non-resource-abundant countries in the same period is set to leap by 1%, going from 2.4% to 3.4%.
This growth would be backed by both private consumption and gross fixed investment. “Growth in non-resource abundant countries is supported by gross fixed investment and private consumption, and these countries are expected to grow from 2.4 percent in 2023 to 3.4 percent in 2024, and further increase to 4 percent in 2025–26,” the report adds.
