South Africa will briefly surpass Nigeria as Africa’s largest economy in 2024, according to reports from the IMF in its World Economic Outlook.
The IMF’s World Economic Outlook anticipates South Africa’s gross domestic product (GDP) to reach $401 billion by 2024 at current prices.
This would exceed Nigeria’s GDP of $395 billion and Egypt’s GDP of $358 billion.
South Africa, the most industrialised nation in Africa, is expected to claim the top position for just one year before falling behind Nigeria once more and subsequently slipping to third place behind Egypt by 2026, as outlined in the report.
The IMF projects that South Africa’s economy will grow by 0.9% this year and 1.8% in 2024.
Furthermore, there’s the potential for even faster growth, ranging from 2.5% to 3%, provided South Africa addresses its power supply issues, resolves logistical bottlenecks, and implements other necessary reforms.
Economic growth in Nigeria is expected to slow to 2.9% in 2023 from 3.3% in the previous year.
However, the IMF estimates the economy will grow by 3.1% in 2024 and attributes the lag to the effects of high inflation, which currently stands at 26.72% and has been in double digits since 2016.
President Tinubu has announced a wide range of policy reforms since his assumption of office, which have received applause from the international community.
However, back at home, the reforms are causing Nigerians pain as the naira has lost almost 50% of its value and the cost of fuel has risen by over 200%.
What you should know
Nigeria first trumped South Africa to become the continent’s largest economy in 2014 after rebasing its GDP.
The rebasing exercise saw its GDP almost double and rise to just over $500 billion, which shot up its ranking as the 26th biggest economy in the world then.
Both countries have been facing internal economic issues in recent times. While problems with electricity are a recent occurrence in South Africa, it is a perennial problem in Nigeria that has defied almost all solutions.
There is also the problem of unemployment in both countries, while a new methodology saw a sharp decline in Nigeria’s unemployment rate to 4.1%, while South Africa stands at almost 33%, with youth unemployment at 62% for 15- to 24-year-olds.
Nigeria also faces challenges raising oil production, its major foreign exchange earner.
The country has failed to meet its OPEC oil production quota for months now due to perennial crude oil theft in the Niger Delta region.
Oil thieves has been Nigeria’s major economic slowdown. If the security personnel manage their brief very well, we shall gain traction.
Let our economy handlers look towards Non Tax Revenues (managed by MOFI) in order to increase the growth on the other side – Taxable Revenues.
All these put together Nigeria economy will be on the upside.
Thank you.
Paul Iteh, FCIA