Nigeria to Lose Africa’s Largest Economy Status in 2024

By Adedapo Adesanya

Nigeria is set to lose its status as Africa’s largest economy to South Africa by 2024, according to forecasts by the International Monetary Fund (IMF).

According to the Bretton Wood institution, Nigeria will be displaced from number one to two while Egypt will take over South Africa’s number three position.

However, Nigeria is expected to take back the premier spot by 2026.

The IMF’s World Economic Outlook envisions South Africa’s gross domestic product reaching $401 billion based on current prices in 2024 compared with Nigeria’s $395 billion and Egypt’s $358 billion.

South Africa is the most industrialised nation on the continent and is expected to only hold the top spot for a year before it once again lags behind Nigeria and then falls to third place behind Egypt in 2026, according to the report, which was released last week.

IMF data shows Nigeria’s economy has eclipsed South Africa’s since 2018. The country has had to deal with a decline in the production of oil, which has been worsened by oil theft and underinvestment and it has been grappling with surging inflation and a plunge in the value of the Naira.

Upon his assumption of office, President Bola Tinubu announced significant policy changes including the removal of fuel subsidies and unification of a multiple exchange rate regime aimed at getting the finances back on track.

However, challenges remain including taking steps to address Dollar shortages and boost tax revenue.

Those measures are causing initial pain in Africa’s most populous nation, but are expected to increasingly pay dividends going forward. The IMF sees GDP growing by 2.9 per cent this and expanding to 3.1 per cent next year.

The reforms should lead to “stronger and more inclusive growth,” Mr Daniel Leigh, division chief in the IMF’s research department, told reporters at the fund’s annual meetings in Marrakech, Morocco, last week.

In 2013, under the administration of former President Goodluck Jonathan, Nigeria became the largest economy in Africa and the 26th largest in the world following the rebasing of its GDP from 1990 to 2010 at constant prices.

Following the recalculation, the country’s GDP emerged at $509.9 billion in 2013 up from $285.56 billion, an 89.2 per cent increase. Accordingly, Nigeria’s GDP per capita almost doubled from $1,437 to $2,688.