South Africa to overtake Nigeria as Africa’s biggest economy

South Africa is set to clinch the top as Africa’s biggest economy, a forecast from the International Monetary Fund (IMF) has shown.

Nigeria’s economy, which ranked as Africa’s largest in 2022, is set to slip to fourth place this year and Egypt, which held the top position in 2023, is projected to fall to second behind South Africa after a series of currency devaluations, International Monetary Fund forecasts show.

The IMF’s World Economic Outlook projects Nigeria’s gross domestic product at $253 billion based on current prices this year, lagging energy-rich Algeria at $267 billion, Egypt at $348 billion and South Africa at $373 billion. 

South Africa, according to the IMF forecast, will remain the continent’s largest economy until Egypt reclaims the mantle in 2027, while Nigeria is expected to remain in fourth place for years to come, the data shows. 

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Daily Trust reports that Nigeria and Egypt’s economies have experienced a downturn following high inflation and devaluation of the local currencies.

President Bola Tinubu since assumption of office in May last year announced significant policies including floating of the naira and removal of fuel subsidy.

“Unlike Nigeria’s naira and Egypt’s pound, the value of South Africa’s rand has long been set in the financial markets and it has lost about 4% of its value against the dollar this year.

Its economy is expected to benefit from improvements to its energy supply and plans to tackle logistic bottlenecks,” the IMF forecast added.