In the last days of August 2019, World Population Review released updated data about the richest countries in Africa and the details may have sprung up more than a few surprises.
According to the latest data, the richest country in Africa is neither South Africa, nor Egypt, nor any of the usual suspects. Technically, Seychelles is the richest country in Africa in terms of collective national wealth, and countries like Equitoral Guinea and Gabon make up the rest of the top three.
One may begin to wonder how it is that these less-known, smaller African countries are topping the national wealth charts in the presence of the traditional heavyweights like Nigeria, South Africa, and Egypt, and it does beg some wonder. But the technicality supporting why those relatively smaller economies are considered richer countries is quite easy to grasp.
Countries like Egypt, Nigeria, South Africa, Algeria, and pop up often pop up in discussions about Africa’s richest nations, and they actually all have strong claims to the accolade on account of their superior Gross Domestic Product (GDP) numbers.
The problem, however, is that GDP does not necessarily paint the real picture. GDP figures do not fully portray how rich or poor the individuals in a country are — at best, it reflects how productive the country is.
While there are several ways to compare the wealth of a nation — and GDP happens to be one of the best and most commonly-used metric – nominal GDP per capita usually gives a better indication of just how well-off a country’s citizens really are.
Nominal GDP per capita is derived by dividing the total value of goods and services produced by a country by the population of that country. That gives a more candid picture of the situation of things.
And based on this data, Seychelles is the richest country in Africa with a nominal GDP per capita of over USD 15 K. The second-richest nation — and the only other nation in Africa with a GDP per capita of over USD 10 K — is Equatorial Guinea. Other rich nations based on this measurement include:
- South Africa
The purchasing Gross Domestics Product, however, remains the most popular metric for determining who gets to be on the national wealth list. The GDP is defined as the value of the goods and services that come from a nation for a period of one year.
Using purchasing power parity (PPP) helps reduce differences in the cost of living and exchange rates, providing more accurate results. Based on the nominal GDP at PPP, the richest nations in Africa are:
- South Africa
Featured Image Courtesy: Krool Magazine