African Business

By | March 3, 2021

The most important profession in Africa is agriculture; it employs over half the population. Measured as a share of GDP, agriculture’s contribution to the monetary economy is 20% (1990). The industrial sector employs approx. 5% and contributes 16% of GDP. As measured, the service sector is of the greatest importance with approx. 45% of GDP. Unknown figures from the so-called informal sector must be added to these figures.

African Countries

Country Total GDP (million US dollars) Agriculture’s share of GDP (percent) Manufacturing industry’s share of GDP (percent)
Algeria 180 689 (2018) 12.3 (2017) 35.3 (2017)
Angola 105 751 (2018) 10.0 (2017) 6.6 (2017)
Benin 10 359 (2018) 22.6 (2018) 12.3 (2018)
Botswana 18 616 (2018) 2.0 (2018) 5.2 (2018)
Burkina Faso 14 442 (2018) 28.6 (2018) 5.2 (2018)
Burundi 3,078 (2018) 30.6 (2016) 9.4 (2016)
Central African Republic 2 380 (2018) 33.9 (2017) 15.7 (2017)
Comoros 1,203 (2018) 29.9 (2017)
Djibouti 1 966 (2018) 2.3 (2018) 4.4 (2018)
Egypt 250 895 (2018) 11.2 (2018) 16.3 (2018)
Equatorial Guinea 13 317 (2018) 2.3 (2018) 25.4 (2018)
Ivory Coast 43 007 (2018) 19.8 (2018) 12.8 (2018)
Eritrea 2 608 (2011) 12.0 (2017) 6.0 (2016)
Ethiopia 84 355 (2018) 31.1 (2018) 5.8 (2018)
Gabon 17,017 (2018) 5.3 (2017) 17.6 (2017)
Gambia 1 624 (2018) 23.0 (2017) 4.5 (2017)
Ghana 65 556 (2018) 19.7 (2017) 10.9 (2017)
Guinea 10,990 (2018) 17.8 (2018) 10.0 (2018)
Guinea-Bissau 1 458 (2018) 47.5 (2018) 10.5 (2018)
Cameroon 38 502 (2018) 14.3 (2018) 15.3 (2018)
Cape Verde 1 987 (2018) 4.7 (2018) 7.0 (2018)
Kenya 87 908 (2018) 34.2 (2018) 7.7 (2018)
Congo-Brazzaville 11 264 (2018) 7.1 (2018) 6.5 (2017)
Congo-Kinshasa 47 228 (2018) 19.1 (2018) 18.1 (2018)
Lesotho 2,792 (2018) 6.1 (2017) 13.7 (2017)
Liberia 3 249 (2018) 37.4 (2018) 1.8 (2018)
Libya 48 320 (2018) 1.8 (2008) 4.5 (2008)
Madagascar 12 100 (2018) 19.9 (2017) 12.9 (2008)
Malawi 7 065 (2018) 26.1 (2017) 9.4 (2017)
Mali 17 197 (2018) 38.5 (2018) 12.6 (2016)
Morocco 118 495 (2018) 12.0 (2018) 15.7 (2017)
Mauritania 5,366 (2018) 24.4 (2018) 8.0 (2014)
Mauritius 14 220 (2018) 2.8 (2018) 11.4 (2018)
Mozambique 14 458 (2018) 21.4 (2018) 10.7 (2018)
Namibia 14,522 (2018) 7.2 (2018) 10.1 (2018)
Niger 9 240 (2018) 39.7 (2017) 5.7 (2017)
Nigeria 397 270 (2018) 21.2 (2018) 7.8 (2018)
Rwanda 9 509 (2018) 29.0 (2018) 5.9 (2018)
São Tomé and Príncipe 422 (2018) 11.4 (2018) 7.4 (2018)
Senegal 24 130 (2018) 16.6 (2018) 18.7 (2018)
Seychelles 1,590 (2018) 2.0 (2018) 6.4 (2018)
Sierra Leone 4,000 (2018) 60.3 (2017) 2.0 (2017)
Somalia 4 721 (2018) 62.7 (1990) 4.4 (1990)
Sudan 40 852 (2018) 31.5 (2018) 6.1 (2011)
South Africa 368 288 (2018) 2.2 (2018) 11.8 (2018)
South Sudan 3,071 (2016) 11.4 (2016) 4.6 (2016)
Tanzania 57 437 (2018) 28.7 (2017) 7.7 (2017)
Chad 11 303 (2018) 44.8 (2018) 3.0 (2016)
Togo 5,300 (2018) 23.6 (2018) 8.0 (2018)
Tunisia 39 861 (2018) 9.5 (2017) 14.5 (2017)
Uganda 27 477 (2018) 24.2 (2018) 8.3 (2018)
Zambia 26 720 (2018) 2.6 (2018) 8.5 (2018)
Zimbabwe 31 001 (2018) 12.1 (2018) 8.2 (2018)


Africa Agriculture 2

In agriculture, in particular, food is grown for own consumption or for local sales. Corn is the most important crop, but in areas where less water is available during the growing season, millet and sorghum are grown. The cereal crops are supplemented with root vegetables (cassava, yams and sweet potatoes) and legumes (beans and peas). The importance of the individual crops varies locally according to natural conditions, and the distribution has changed significantly over time. Maize was first propagated in the 1800s, where it replaced other grain crops (e.g. durra), but has subsequently lost ground relative to wheat; the use of new high-yielding or drought-resistant varieties has become more widespread. varieties with a shorter ripening time, which provides better security for a crop yield where the length of the rainy season is uncertain. In turn, these varieties have increased farmers’ market dependence.

Alongside the food crops, a large variety of sales crops are grown for the national markets and for export. Africa exports oily crops such as peanuts and palm oil seeds, but also coffee, tea, cocoa and fruits (e.g. dates and olives). Some countries have large exports of industrial crops, especially cotton. In the late 1900-t. exports were spread across several products, and Africa has seen increasing sales of fresh fruits, vegetables and specialty crops such as cut flowers.

The majority of agriculture is made up of farms whose main labor force is the family members. The women do most of the work in the family farm, especially with regard to the cultivation of food crops and most commonly where the men take on migrant work. In the cultivation of sales crops, men generally participate more. The increased schooling means that the children are less involved in the work than before; together with widespread migrant work, this means that agriculture in large parts of Africa is limited by the shortage of labor during peak periods.

Growing systems on the family farms, like the relationship between self-sufficiency and sales crops, has changed continuously. The most widespread cultivation systems in Africa are based on different varieties of sweat, where the soil regains fertility for a period of fallow, before it is used for farming after burning, until the yield is again too low and the process is repeated. However, population growth and consequent expansion of agricultural land has meant that the fallow periods have become ever shorter and the need for fertilizers has increased. However, the use of fertilizers is not widespread in Africa due to the limited financial resources of family farms. Consequently, the consequence is therefore declining yields, deterioration in soil fertility, erosion, etc., and family farming generally has difficulty increasing production in line with population growth.

Another problem is the low agricultural prices on the world market as well as locally. National governments have been trying to keep prices down for the benefit of urban populations, and on the world market, agricultural subsidies in Europe and the US mean that Africa’s products are subjected to considerable competition. The low prices also mean that it is often better to pay for investing. surplus in sectors other than agriculture.

Plantations. In addition to family farms, plantation farming is widespread in Africa. Many plantations are owned or managed by foreign companies who have the necessary expertise and access to the necessary market channels. On the plantations crops are grown such as sugar, fruits (eg pineapple) and vegetables (eg tomatoes). In some countries (including Kenya and Ivory Coast), the plantation form has been replaced by a system where farmers deliver the crops on contract terms. This reduces the investment of the foreign company and creates a group of commercialized farms which, based on the security of the contract cultivation, can reduce the degree of self-sufficiency. In turn, these uses become heavily dependent on price fluctuations in the world market.

Animal Breeding. Throughout history, cattle farming has played a major role; the grass saw is utilized by cattle nomads, while in areas with more rainfall there are farmers who combine farming and livestock farming. Cattle farming has increasingly been squeezed into the process of change in Africa. The expanding farm uses the cattle grazing areas; these are often the areas that have the most water and are therefore important for cattle during the dry season. At the same time, several nomads have become settled around wells; it is a development that is supported in order to reduce the spread of cattle diseases, but that means that grazing resources are not utilized optimally.

Although cattle farming has increasingly become market-oriented, it is characterized by the fact that several ethnic groups mainly perceive cattle as representing a wealth, a security against future problems.

Of other animals, especially goats and chickens are widespread, and as animal protein sources they are more important than cattle. For transport, camels (dromedaries) and horses are widespread in North Africa. water in the rest of Africa. The prevalence of plows in the 1900-t. has led to increased use of bulls as draft animals.


Actual forestry is very little widespread in Africa. The utilization of the forests has been particularly extractive, as wild trees have been felled and exported (especially noble woods) or utilized locally for construction, furniture, etc. In some places, planting plants have been set up in connection with the construction of a paper industry.


Africa Mining

A systematic study of Africa’s mineral resources began only in the 1950s when the price of minerals peaked during the Korean War. However, some mining operations are of considerably older date, but the continent’s mineral resources are still only exploited to a limited extent.

In southern Africa, large deposits of metals (gold, iron, copper and chromium), diamonds and coal are exploited, and South Africa is one of the world’s most important mining countries, according to Countryaah. In Angola, some oil is produced. Although the first exploitation took place in the early 1900s, southern Africa still has large untapped deposits, especially in Angola and Mozambique. The mineral deposits in the area are of global importance, including the so-called strategic minerals; economic: gold and platinum; military: vanadium, antimony, chromium and cobalt. The strategic importance of the latter metals is due to use in steel alloys in the armor and aerospace industries.

In the rest of Africa, there are several mineral deposits on a par with southern Africa, but they are exploited to a lesser extent. In Central Africa, large deposits of cobalt, tin and uranium are exploited, just as several countries have oil production. West Africa was an early exporter of gold and it is still being mined in Ghana. In this region, iron ore, crude phosphate, uranium and bauxite are also extracted, while Nigeria is the continent’s largest oil producer. In North Africa, Libya and Algeria also have significant oil production.

Several African countries are highly dependent on mining revenues; For example, the mining sector contributes over 40% of GDP in Congo and Gabon, and mineral exports constitute a dominant part of the foreign economy in several places. Most years, copper and copper products make up over 90% of Zambia’s exports; Zambia is therefore heavily dependent on copper price developments in the world market, and the country has been hit hard by the generally low prices of mineral raw materials in the 1980s and early 1990s.


Deep sea fishing is only poorly developed. A modern fishing fleet requires large investments and is only available in a few countries. Instead, several countries are leasing fishing rights in their offshore territory to fishing fleets from the EU, Japan and Russia. In contrast, coastal and inland fishing is widespread and important. Catching methods vary, but motor boats and nylon nets are increasingly used. The products are often marketed dried, and for a large part of the poorest population, fish is an important source of animal protein.


Most countries had only a very modest industrial sector. Only in South Africa, Zimbabwe (ex-South Rhodesia) and Egypt did industrialization begin before 1960. This meant that the African countries were facing major investments in order to create the basis for a local industry. The infrastructure, including especially energy plants, had to be expanded. Dam construction for the utilization of hydropower was given high priority and was completed in many places (Aswan, Akosombo, Cabora Bassa). However, there is still great untapped potential for hydropower in the major rivers. However, the most important commercial energy source is oil, and several countries have built oil refineries for locally produced or imported crude oil. Large sums have been spent on the construction of power plants; However, security of supply is still a problem,

Despite the high priority given to developing a national industry, Africa’s industrial sector is still modest. The industry is predominantly aimed at the national market and at replacing previous imports with locally manufactured goods. In most countries, the state has played a significant role in building industry. Customs and import restrictions have created protected domestic markets; this protection against imports applies to both national industry and subsidiaries of transnational corporations. This so-called import – substitution industrialization strategy has resulted in the building of a national production in the food, wood, textile and shoe industries. However, it has proved much more difficult to use the same strategy to create a national production in durable consumer goods (electrical appliances, transport equipment, etc.) and in the heavy industry (cement, steel and machine industry). The main problem of the strategy is that the national market is very limited; the demand-able demand for, for example, durable goods is limited to a few upper classes. The industry is therefore unable to achieve economies of scale and the goods are relatively expensive.

Although production has been economically unprofitable, a large number of countries have established state-owned companies in the heavier part of the industry. These have burdened the state budget and demanded transfers of financial resources from the agricultural sector to the industry. In particular, following the international downturn that followed the oil price rises in 1972-74 and the subsequent debt crisis, growth in this part of the industry has slowed.

After independence, there has been a great growth in the so-called informal sector, including small industries, often with craftsmanship.

Apart from industries linked to a modest processing of export raw materials (eg vegetable oil pressing), Africa’s industry is very export-oriented. Only a few countries have been successful with an export-oriented industrialization strategy that could take advantage of low wages. However, such industries are found in Morocco, Tunisia and Mauritius, especially in the textile industry, but in general it has proved difficult to compete with similar industries in, for example, Southeast Asia. Therefore, there has been interest in establishing regional collaborations in Africa with a view to a later entry into the world market.

Most of the actual industry is located in capitals and in the few big cities, while the small industries are in the suburbs of cities and around marketplaces in urban and rural areas.

The informal sector

This manufacturing sector consists of small industry, repair companies, other services and trade. Production is flexible and geared to local needs; these are usually companies with less than 10 employees. The small industries are especially widespread in the clothing (including tailoring), metal, wood and food industries (eg bakeries and breweries). The informal trade sector consists of a wide-ranging network in which street sellers are an important element. Trade is often dominated by particular ethnic groups and by women (especially in West Africa). Furthermore, the sector consists of small businesses, shoe polishers, hairdressers, etc. in the streets and markets. Also in the field of transport, smaller contractors play an important role, taking advantage of the lack of capacity in the state and larger private transport companies.

The service sector plays a big role for many African families as a source of income; often at least one family member is employed in this sector; by trading the family’s own products.

The informal sector national economic significance is not known and therefore not included in the calculation of GDP, but it is estimated that småindustrien in the early 1980s contributed more than 2/3 of total industrial employment in Africa.


In addition to the informal sector, Africa’s service sector consists mainly of a large government sector with many public servants as well as a modest modern service sector in the major cities.

A special part is the tourism industry, which in many countries is a very important source of income. The industry’s most important assets are the national parks in the savannah areas and ancient monuments in North Africa. Only a few places are mass tourism based on sun and beach; the African countries have difficulty competing with, for example, southern Europe in this area.