Seychelles ranks as Africa's richest country, Global Finance Magazine reports |12 January 2024
In a recent report by Global Finance Magazine, Seychelles has been ranked the richest country in Africa, securing the 56th spot among 193 nations globally in 2023.
The key indicator for this ranking is the Gross Domestic Product (GDP) per capita, which stands at $39,662.
Determining a nation's wealth is complex, involving more than simply looking at the GDP, which represents the total value of all goods and services produced by a country in a year.
Speaking to Seychelles NATION, Economist and Business Development Consultant, Peter Roselie, explained that the traditional method of assessing a country's prosperity by merely considering its GDP does not capture the whole picture, failing to take into account factors like income inequality, or the varying purchasing power in different countries. If GDP alone was considered, the richest nations would be the ones with the largest GDP, including the United States, China, Japan and Germany.
To provide a more accurate representation, GDP per capita is used, dividing the total economic output by the population of full-time residents. However, even this presents certain challenges as it does not consider the differing costs of living. To address this, analysts adjust the GDP for Purchasing Power Parity (PPP), considering inflation rates and regional price differences in each given country.
Interestingly, many of the richest countries globally are also the smallest in terms of size. Nations like San Marino, Luxembourg, Switzerland, and Singapore benefit from sophisticated financial sectors, attractive tax regimes, and thriving tourism, while others, such as Qatar and the United Arab Emirates, have an abundance of natural resources.
As per Global Finance Magazine, the pandemic and global economic slowdown have barely affected these small nations, demonstrating the resilience of their economies. Despite their small populations, their economies remain disproportionately large, contributing to their high rankings.
Global Finance Magazine's observation emphasises the wealth disparity worldwide. While the richest countries boast a per-capita purchasing power exceeding $105,000, the average per-capita purchasing power is $1,380 in the world’s poorest countries.
The 10 poorest countries, all of which are African countries, face significant economic challenges, and continue to live in poverty. This is despite the fact that “the world has enough wealth and resources to ensure that the entire human race enjoys a decent standard of living”, Global Finance Magazine states.
South Sudan emerges as the world's poorest country in 2023, followed by Burundi and the Central African Republic. Somalia, the Democratic Republic of Congo, Mozambique, Niger, Malawi, and Chad make up the top ten poorest countries in 2023.
On the regional front, Mauritius is ranked 66th worldwide with a GDP per capita of $29,164, while Madagascar finds itself in the 183rd spot, with a GDP per capita of $1,916.
Reacting to the findings, Mr Roselie expressed confidence in the analysis, which are published by very reputable organisations, he said. He however asserted the need for financial and economic education among the population, recognising the importance of understanding these findings, and what it means for each citizen.
According to Global Finance Magazine, the International Monetary Fund (IMF) advises caution regarding the statistics. A number of nations in the rankings are considered to be tax havens, meaning their wealth was originally generated elsewhere, artificially inflating their GDP.