Africa and Latin America for case solvers
Nigeria, South Africa, Egypt, Kenya, Ethiopia, Brazil, Mexico, Argentina, Colombia and Chile: growth, currencies and inflation, young and urban populations, inequality, and what they mean in a case.
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Key takeaways
- Africa's largest markets are young and growing fast in people, with currency and inflation risk; Latin America's are urban, middle-income and very unequal.
- Governments often own or control energy, power and transport companies, and set price controls or import rules in some sectors; check them early.
- Currency risk first: a strong year in local money can be a weak year in dollars.
Key idea
Africa's largest markets are young and growing fast in people, with currency and inflation risk; Latin America's are urban, middle-income and very unequal. In both, a case often turns on the exchange rate, on prices people can afford, and on trade deals with bigger neighbours.
Africa: size and growth
| Economy | GDP 2025 (USD billions) | Real growth 2025 (percent) | Real growth 2026, projected (percent) | GDP per person 2025 (USD) | Population 2025 (millions) | Inflation 2025 (percent) |
|---|---|---|---|---|---|---|
| Nigeria | 290 | 4 | 4.1 | 1,220 | 237.6 | 23 |
| South Africa | 427 | 1.1 | 1 | 6,770 | 63.1 | 3.2 |
| Egypt | 365 | 4.4 | 4.2 | 3,380 | 107.9 | 20.4 |
| Kenya | 136 | 4.9 | 4.5 | 2,560 | 53.4 | 4.1 |
| Ethiopia | 109 | 9.2 | 9.2 | 990 | 110.6 | 13.2 |
Source: IMF World Economic Outlook database, April 2026 (2025 values are IMF estimates; 2026 values are projections), checked 2026-10-01. GDP in current US dollars at market exchange rates.
So-what
Fast real growth and young populations, but low income per person and, in Nigeria, Egypt and Ethiopia, high inflation.
Currencies drive the dollar numbers. Egypt's central bank decided on 6 March 2024 to let the exchange rate be set by market forces, and Egypt's inflation fell from 33.3 percent in 2024 to 20.4 percent in 2025 (IMF). Ethiopia grew 9.2 percent in real terms in 2025, yet its GDP measured in dollars fell from USD 142.1 billion to USD 109.1 billion, which can only happen when the currency loses a lot of value against the dollar. South Africa's government and central bank set a new, lower inflation target of 3 percent (with 1 point either side) in November 2025. Nigeria's statistics office reported real growth of 3.89 percent in the first quarter of 2026.
Ethiopia's GDP was USD 142.1 billion in 2024 and USD 109.1 billion in 2025 (IMF), while real growth was 9.2 percent. By what percent did GDP change in US dollars?
Latin America: size and growth
| Economy | GDP 2025 (USD billions) | Real growth 2025 (percent) | Real growth 2026, projected (percent) | GDP per person 2025 (USD) | Population 2025 (millions) | Inflation 2025 (percent) |
|---|---|---|---|---|---|---|
| Brazil | 2,280 | 2.3 | 1.9 | 10,690 | 213.4 | 5 |
| Mexico | 1,833 | 0.6 | 1.6 | 13,740 | 133.4 | 3.8 |
| Argentina | 681 | 4.4 | 3.5 | 14,350 | 47.5 | 41.9 |
| Colombia | 457 | 2.6 | 2.3 | 8,620 | 53 | 5.1 |
| Chile | 355 | 2.3 | 2.4 | 17,730 | 20 | 4.2 |
Source: IMF World Economic Outlook database, April 2026 (2025 values are IMF estimates; 2026 values are projections), checked 2026-10-01. GDP in current US dollars at market exchange rates.
So-what
Middle-income economies growing 1 to 4 percent a year; Argentina's inflation is still high but far below its 2024 level.
Argentina's inflation fell from 219.9 percent in 2024 to 41.9 percent in 2025, and the IMF projected 30.4 percent for 2026. Brazil began a long change to its consumption taxes in January 2026: two new taxes on goods and services (CBS and IBS) appear on invoices for information only during 2026, before they start to replace the old taxes in later years. Mexico depends on trade with the United States, so the July 2026 decision not to renew the USMCA in its current form (it stays in force while talks continue) matters for every Mexican export case.
| Economy | Urban population (percent) | Aged 0 to 14 (percent) | Aged 65 and over (percent) |
|---|---|---|---|
| Nigeria | 63.8 | 40.5 | 3.1 |
| Ethiopia | 24.1 | 38.8 | 3.3 |
| Kenya | 32.2 | 36.3 | 3 |
| Egypt | 42.9 | 31.6 | 5.3 |
| South Africa | 63.8 | 25.7 | 6.9 |
| Mexico | 80 | 24.1 | 8.5 |
| Brazil | 88.2 | 19.4 | 11.5 |
| Argentina | 92.4 | 21 | 12.6 |
Source: World Bank World Development Indicators, 2025 values, checked 2026-10-01.
So-what
African markets are very young and, outside Nigeria and South Africa, mostly rural; Latin American markets are mostly urban.
Income is spread very unevenly in both regions. The World Bank's latest Gini index is 54.1 for South Africa (2022), 54.4 for Colombia (2024), 50.3 for Brazil (2024) and 42.6 for Mexico (2024). Trade deals tie markets together: trading under the African Continental Free Trade Area began on 1 January 2021, and Mexico trades heavily with the United States under the USMCA.
The state and the regulators
- Central banks matter more than usual, because they manage the currency: the Central Bank of Nigeria, the South African Reserve Bank, the Central Bank of Egypt, the Central Bank of Kenya, the Central Bank of Brazil, the Bank of Mexico and the Central Bank of Argentina.
- Governments often own or control energy, power and transport companies, and set price controls or import rules in some sectors; check them early.
What this means in a case
- Currency risk first: a strong year in local money can be a weak year in dollars. Look at local sourcing, pricing in local money, and how fast prices can be adjusted.
- Price points: with GDP per person of about USD 1,220 in Nigeria and about USD 10,690 in Brazil, small packs, credit and low entry prices widen the market, while unequal incomes leave room for premium products at the top.
- Growth comes from people and cities: young, fast-growing populations moving to cities create demand for food, phones, banking, housing and education, but the route to market (roads, power, payments) decides how fast a company can reach them.
Argentina's inflation was 219.9 percent in 2024 and 41.9 percent in 2025 (IMF). By how many percentage points did it fall?
A foreign company's sales in Ethiopia grew strongly in local money in 2025. Why might its results in US dollars still look poor?
Sources for this lesson (15)
- IMF World Economic Outlook database, April 2026: GDP at current prices, USD billions (IMF DataMapper, indicator NGDPD)
- IMF World Economic Outlook database, April 2026: real GDP growth, annual percent change (IMF DataMapper, indicator NGDP_RPCH)
- IMF World Economic Outlook database, April 2026: GDP per capita at current prices, USD (IMF DataMapper, indicator NGDPDPC)
- IMF World Economic Outlook database, April 2026: inflation, average consumer prices, annual percent change (IMF DataMapper, indicator PCPIPCH)
- IMF, World Economic Outlook Update, July 2026: "Global Economy in Crosscurrents of War and Technology" (Table 1 and text)
- World Bank, World Development Indicators: urban population, percent of total (2025 values)
- World Bank, World Development Indicators: population aged 0 to 14, percent of total (2025 values)
- World Bank, World Development Indicators: population aged 65 and above, percent of total (2025 values)
- World Bank, World Development Indicators: Gini index (latest survey year by country)
- Central Bank of Egypt, Special MPC press release, 6 March 2024
- National Treasury of South Africa, "Announcement of the new inflation target for South Africa", 12 November 2025
- National Bureau of Statistics, Nigeria: home page GDP release (first quarter 2026)
- Comitê Gestor do IBS (Brazil): the consumption tax reform starts in 2026 with an adaptation period (notice in Portuguese)
- Office of the US Trade Representative, "Ambassador Greer Issues Statement on the USMCA Joint Review", July 2026
- AfCFTA Secretariat: about the African Continental Free Trade Area (trading began 1 January 2021)
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