According to the World Bank’s latest edition of Global Economic Prospects (PDF), three of the world’s fastest growing economies in 2017 are in Africa, with Ethiopia leading all countries. Ethiopia’s world-leading pace of growth is linked to the country’s economic diversification, infrastructure investment, and agricultural production.
To learn more about innovation within Ethiopia’s tech sector, read Sheba Valley: The Making of Ethiopia’s Tech Sector.
Regionally, Asia continues to experience above-average growth, while slowdowns in Nigeria and South Africa (and Angola) have depressed growth projections in Sub-Saharan Africa.
| Group | 2017 GDP Growth (%) |
|---|---|
| World | 3.4 |
| High-Income Countries | 1.9 |
| Emerging & Developing Countries | 4.1 |
| East Asia and Pacific | 6.2 |
| South Asia | 6.8 |
| Europe and Central Asia | 2.5 |
| Latin America and the Caribbean | 0.8 |
| Middle East and North Africa | 2.1 |
| Sub-Saharan Africa | 2.6 |
| Sub-Saharan Africa, excluding Nigeria & South Africa | 4.3 |
Why it Matters:
Growing economies create myriad business opportunities for innovators with Keynesian animal spirits. However, according to Ido Sum, a partner at venture capital firm, TLcom, “Africa is one of the toughest and least forgiving capital raising environments.”
Given that investors balance perceived risk against perceived opportunity, above-average levels of economic growth may provide capital raising advantages for African entrepreneurs in high-growth economies.
Since Ethiopia is projected to continue to grow at above average levels in the medium-term, the argument made by Zekarias Amsalu Dubale that Ethiopia’s tech sector is poised to provide the world with innovative solutions, products, and technological advances is not far-fetched.
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