Africa's GDP Is Bigger Than You Think

On Sept. 30, Kenya announced the results of its “rebasing”—a recalculation of its gross domestic product to include previously unaccounted-for economic activity. Its GDP expanded 25.3 percent, to $55.2 billion, moving it up several rungs on the list of Africa’s largest economies, to 9th. The government adjusted its 2013 growth rate from 4.7 percent to 5.7 percent.

Kenya’s is the latest in a series of rebasings that have reinforced investors’ perception of the area’s growth potential. Even as Ebola ravages West Africa and as the Democratic Republic of Congo is still recovering from a devastating civil war, many of the other economies in the region remain dynamic: The International Monetary Fund predicts sub-Saharan growth will be 5.8 percent next year, up from an estimated 5.1 percent for 2014. Many of the area’s governments issue bonds that look like good bets based on that projected growth. “Africa’s the final frontier among emerging markets for high yield,” says Brett Rowley, emerging-markets sovereign analyst for TCW Group in Los Angeles.