South Africa may overtake Nigeria as Africa’s biggest economy – IMF predicts
The International Monetary Fund (IMF) has disclosed in its forecast that South Africa may displace igeria as Africa’s biggest economy.
According to the IMF World Economic Outlook, South Africa, the most industrialised country on the African continent, is reaching towards achieving $401 gross domestic product (GDP) in 2024.
The global financial institution, however, envisioned that based on current prices, Nigeria and Egypt have GDPs of $395 billion and $358 billion, respectively.
IMF further noted that South Africa is billed to top the chart for a year before it again trails Nigeria, the most populated African nation.
It said South Africa may further plummet to third place behind Egypt in 2026, according to the report released last week.
This is coming as Nigerian President Bola Tinubu has taken significant policy changes, including removing fuel subsidies, addressing dollar shortages, and boosting tax revenue.
The reforms should lead to “stronger and more inclusive growth,” Daniel Leigh, division chief in the IMF’s research department, told reporters at the fund’s annual meetings in Marrakech, Morocco, last week.
According to Bloomberg, Nigeria and Egypt have embarked on vital economic policies that will bring them back to the top soon.
“We believe the IMF’s projections reflect where it believes meaningful reforms will take place.
“South Africa’s transient emergence as Africa’s largest economy in 2024 is mainly due to the shrinking of Nigeria and Egypt’s GDP in dollar terms, following sharp currency devaluations.
“However, the long-term trajectory shows Nigeria and Egypt regaining their top spots, with the former taking a strong lead.
“For Nigeria to realise the GDP expansion projected by the IMF, we think oil output must be restored to its potential; insecurity needs tackled; and the bottlenecks in the power sector addressed,” Bloomberg said.