South Africa May Overtake Nigeria as Africa’s Largest Economy – IMF

The International Monetary Fund (IMF) has released forecasts suggesting that South Africa could surpass Nigeria to become the largest economy in Africa.

According to the IMF’s World Economic Outlook, South Africa is projected to reach a gross domestic product (GDP) of $401 billion by 2024, while Nigeria and Egypt are estimated to have GDPs of $395 billion and $358 billion, respectively, based on current prices.

The IMF’s report indicates that South Africa could briefly surpass Nigeria for a year before falling behind again. By 2026, South Africa might even fall to third place behind Egypt.

This development coincides with efforts by the Nigerian President, Bola Tinubu, to implement substantial policy reforms in the country. These changes, combined with a decrease in oil production, have led to challenges such as inflation and a devaluation of the naira in Nigeria.

Tinubu’s administration is striving to revitalize the economy through measures like eliminating fuel subsidies and addressing issues within the foreign exchange system. These reforms are designed to mitigate dollar shortages and enhance tax revenue.

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While these changes are causing initial challenges in Nigeria, they are expected to bring substantial benefits in the future. The IMF forecasts that the GDP will grow by 3.1% next year, compared to 2.9% in 2023.

The division chief in the IMF’s research department, Daniel Leigh, stated that the reforms are expected to result in “robust and more inclusive economic growth.”

These projections suggest a potential shift in the economic landscape of Africa, with South Africa possibly taking the lead in the coming years.