Following the consistent crash of the Naira against the dollar, Nigeria’s economy has lost its place as the largest economy in Africa to South Africa. This is according to a new report by Bloomberg and the IMF.
According to the new reports, South Africa’s rand had gained more than 16 percent against the dollar from the beginning of 2016 and Nigeria’s naira lost more than a third of its value when the Central Bank introduced its new policy on Foreign Exchange in June.
The reports states that South Africa’s economy is currently at $301 billion at the rand’s current exchange rate with the dollar while Nigeria’s GDP is at $296 billion, based on gross domestic product of 2015 published by the International Monetary Fund.
Declining oil prices, reduced oil output due to the activities of militants in the Niger Delta region and shortage of foreign currency are among the reasons Nigeria’s economy shrank by 0.4 percent in three months early this year.
For South Africa, decline in farming and mining output caused it economy to reduce by 0.2 percent. The report adds that although Nigeria is unlikely to be unseated as Africa’s largest economy in the long run, “the momentum that took it there in the first place is now long gone.”