While the country battles with the rift between the state treasury and the state’s National Prosecution Authority (NPA), the country’s economy seems to have been overtaken by its close competitor, Nigeria who is reportedly now Africa’s largest economy
New report from the International monetary Fund (IMF) puts Nigeria back as Africa’s largest economy ahead of South Africa, and Egypt.
South Africa was announced the largest economy in August this year following a surging rand and Nigeria’s naira loss amid recalculation of the country’s Gross Domestic Product (GDP).
IMF’s World Economic Outlook for October, puts Nigeria’s GDP at 415.08 billion dollars, from 493.83 billion dollars in 2015, while South Africa’s GDP was put at 280.36 billion dollars, from 314.73 billion dollars in 2015.
The report, however, noted that Egypt’s 2016 data is not available, but its 2015 size remained at 330.159 dollars while that of Algeria, one of the largest economies on the continent, is put at 168.318 billion dollars.
IMF’s World Economic Outlook for October, however, has Nigeria’s GDP for 2016 some distance ahead of South Africa at an estimated $415.08 billion, from $493.83 billion in 2015.
With SA’s GDP coming down to $280.36 billion, the IMF said it expected SA to achieve a GDP figure of $288.199 billion in 2017, versus $413.685 billion for Nigeria.
“In Nigeria, economic activity is now projected to contract 1.7% in 2016, reflecting temporary disruptions to oil production, foreign currency shortages resulting from lower oil receipts, lower power generation, and weak investor confidence,” the IMF said.
“In South Africa, where policy uncertainty is making the adjustment to weaker terms of trade more difficult, GDP is projected to remain flat in 2016, with only a modest recovery next year as the commodity and drought shocks dissipate and power supply improves,” it said adding that SA expected to remain flat at o.1% growth in 2016.
Both South Africa and Nigeria have seen their GDP per capital decline since 2015, when South Africa was at $5,726, and Nigeria at $2,763.
Nigeria’s GDP is expected to contract 1.7% in 2016, but is expected to recover from recession in 2017, growing at 0.6% in 2017, and 3.3% in 2021.
IMF said South Africa’s economy is still struggling with decline in commodity prices and an overly increased unemployment rate which has been compounded by recent economic and political crisis that has rocked the country.
“A comprehensive structural reform package that fosters greater product market competition, more inclusive labor market policies and industrial relations, and improved education and training, as well as reducing infrastructure gaps is critical to boost growth, create more jobs, and reduce inequality.
“Measures to improve state-owned enterprises’ efficiency and governance, including through greater private participation, are a particularly important element of the needed reform package to lift growth prospects and reduce contingent fiscal risks. While some of
these reforms may take time to yield positive growth effects, immediate benefits can stem from improved confidence and signaling of policy consistency,” it said.
The United States, China and Japan maintain their spots as the largest economies in the world, ahead of Germany, United Kingdom and France as Nigeria regains its status as Africa’s largest economy.