The International Monetary Fund (IMF) has put forth a forecast indicating that South Africa may potentially outpace Nigeria to become the largest economy on the African continent.
According to the IMF’s World Economic Outlook, South Africa, known for its strong industrial base in Africa, is expected to reach a gross domestic product (GDP) of $401 billion by 2024.
In contrast, the IMF’s calculations suggest that Nigeria and Egypt, based on current prices, have GDPs of $395 billion and $358 billion, respectively.
The IMF also foresees a brief period during which South Africa might temporarily surpass Nigeria, the most populous nation in Africa, for a year before eventually trailing behind again.
Their report, released last week, indicates the possibility of South Africa slipping to third place, with Egypt taking the lead in 2026.
This development aligns with actions by the Nigerian President, Bola Tinubu, who has initiated substantial policy reforms.
These reforms, in conjunction with a decline in oil production, have posed challenges for Nigerians, including inflation and the devaluation of the naira.
Tinubu’s administration’s efforts to rejuvenate the economy through measures such as the removal of fuel subsidies and addressing foreign exchange system issues aim to alleviate dollar shortages and boost tax revenue.
While these measures present initial challenges in Nigeria, they are anticipated to yield more substantial benefits in the future.
The IMF anticipates a GDP growth of 3.1% for the next year, compared to 2.9% in 2023.
Daniel Leigh, the division chief in the IMF’s research department, elaborated during the fund’s annual meetings in Marrakech, Morocco last week that these reforms are expected to result in “vigorous and more inclusive economic growth.
