The International Monetary Fund (IMF) has predicted that South Africa could surpass Nigeria to become the largest economy in Africa, driven by projected economic growth and reforms in South Africa, according to the IMF’s World Economic Outlook. South Africa, one of the most industrialized countries in Africa, is expected to approach a gross domestic product (GDP) of $401 billion by 2024, surpassing Nigeria and Egypt.
According to the IMF’s calculations, based on current prices, Nigeria’s GDP is estimated at $395 billion, while Egypt’s GDP stands at $358 billion. The IMF anticipates that South Africa will briefly overtake Nigeria for a year before falling behind once again. By 2026, South Africa could potentially fall to third place, trailing behind Egypt.
The shift in economic ranking aligns with substantial policy reforms implemented by Nigerian President Bola Tinubu. These reforms, combined with a decrease in oil production, have presented challenges for Nigeria, including inflation and a devaluation of the naira.
Tinubu’s administration is working on revitalizing the economy through measures such as eliminating fuel subsidies and addressing issues within the foreign exchange system, aimed at mitigating dollar shortages and enhancing tax revenue.
While these measures have initially posed challenges in Nigeria, they are expected to yield more significant benefits in the future. The IMF projects that the GDP will grow by 3.1% next year, compared to 2.9% in 2023. Daniel Leigh, division chief in the IMF’s research department, explained that these reforms are expected to result in “robust and more inclusive economic growth” during the fund’s annual meetings in Marrakech, Morocco.