Egypt, which secured the top position in 2023, is poised to relinquish it to South Africa, primarily due to a series of currency devaluations.
Based on the IMF’s World Economic Outlook, Nigeria’s gross domestic product is estimated at $253 billion this year, trailing Algeria at $267 billion, Egypt at $348 billion, and South Africa at $373 billion.
Nigeria, Africa’s most industrialized nation, is projected to maintain its status as the continent’s largest economy until Egypt reclaims the top spot in 2027, as per Bloomberg. However, Nigeria is expected to linger in fourth place for the foreseeable future.
Nigeria and Egypt have witnessed economic setbacks due to soaring inflation and significant currency devaluations.
Since assuming the presidency of Africa’s largest economy, Bola Tinubu has initiated a series of reforms, notably implementing a currency float, abolishing the country’s long-standing fuel subsidy, and addressing dollar shortages.
Despite recent signs of recovery, the naira remains 50% weaker against the dollar compared to its value before Tinubu took office.
Egypt, one of the world’s most indebted countries and the IMF’s second-largest borrower after Argentina, also devalued its currency by over 35% to secure additional loans from the International Monetary Fund.
Unlike Nigeria’s naira and Egypt’s pound, the value of South Africa’s rand has long been determined by financial markets. This year, it has experienced a roughly 4% depreciation against the dollar.
Improvements in South Africa’s energy supply and efforts to address logistical challenges are anticipated to benefit the economy.
