The International Monetary Fund has forecast that South Africa will overtake Nigeria as Africa’s biggest economy in 2024, albeit.
According to the IMF’s World Economic Outlook, South Africa’s GDP is expected to reach $401 billion in 2024, compared to $395 billion for Nigeria and $358 billion for Egypt.
However, the IMF also projects that Nigeria will reclaim its position as Africa’s largest economy by 2026.
The IMF’s forecast is based on a number of factors, including the current economic challenges facing Nigeria, such as declining oil production, inflation, and a depreciating naira.
Nigeria’s new president, Bola Tinubu, has implemented a number of significant policy changes in an attempt to revamp the economy, including the removal of fuel subsidies and reforms to the foreign exchange system.
These measures are expected to cause some initial pain, but the IMF believes they will eventually lead to “stronger and more inclusive growth.”
The IMF also projects that Nigeria’s GDP will expand by 3.1% in 2024, compared to 2.9% in 2023.
According to a report Bloomberg, it was predicted that Nigeria and Egypt’s current economic policies will bring them back to the top in the near future.
“We believe the IMF’s projections reflect where it believes meaningful reforms will take place.
“South Africa’s transient emergence as Africa’s largest economy in 2024 is mainly due to the shrinking of Nigeria and Egypt’s GDP in dollar terms, following sharp currency devaluations.
“However, the long-term trajectory shows Nigeria and Egypt regaining their top spots, with the former taking a strong lead,” Bloomberg said.
While South Africa is expected to briefly overtake Nigeria as Africa’s largest economy in 2024, the IMF believes that Nigeria and Egypt will regain their top spots in the long term, with Nigeria taking a strong lead.
In order for Nigeria to realize its full economic potential, the IMF believes that it needs to restore oil production to its potential, tackle insecurity, and address the bottlenecks in the power sector.
