The latest forecast from the International Monetary Fund (IMF) suggests a notable reshuffling in Africa’s economic hierarchy, with Nigeria poised to slip to the fourth position in 2024, behind South Africa, Egypt, and Algeria.
Despite registering a modest 2.54% GDP growth rate in the third quarter of 2023, Nigeria is anticipated to yield its long-held status as Africa’s largest economy, attributed largely to the persistent devaluation of the Naira.
IMF’s April 2024 projections indicate that South Africa will reclaim the mantle of Africa’s largest economy with a GDP of $373 billion, followed closely by Egypt with $348 billion, and Algeria with $267 billion, relegating Nigeria to fourth place with an estimated GDP of $253 billion.
This forecast marks a significant shift from previous years when Nigeria boasted the continent’s largest economy since the GDP rebasing exercise in 2013. However, persistent currency devaluation has eroded its economic standing on the global stage.
Notably, President Bola Tinubu’s tenure since 2023 has witnessed a steep decline in the official exchange rate of the Nigerian Naira, plummeting by over 55%, which has notably impacted the country’s GDP computation.
Meanwhile, in Egypt, recent economic reforms initiated since March 2024 have precipitated a rapid decline in the value of the Egyptian Pound by nearly 40% within a span of just over a month, further reshaping Africa’s economic dynamics.
Despite these fluctuations, the IMF projects a marginal growth trajectory for Nigeria, estimating a 3.34% GDP growth rate in 2024, a modest improvement from the 2.86% recorded in the preceding year.
In contrast, South Africa is expected to witness a relatively subdued growth rate of 0.9% in 2024, while Egypt’s GDP growth is projected to decelerate to 3.0%, marking a decline from the 3.76% growth rate recorded in 2023.
As Nigeria braces for its new economic position in Africa’s evolving landscape, these forecasts underscore the imperative for sustained economic reforms and prudent fiscal policies to navigate the challenges of currency devaluation and foster robust growth in the years ahead.
