A new report from the International Monetary Fund (IMF) puts Nigeria back as Africa’s biggest economy, ahead of South Africa, and Egypt.
In August, South Africa was reported to have regained top spot on the continent, following the recalculation of Nigeria’s Gross Domestic Product (GDP).
The IMF’s World Economic Outlook for October, however, has Nigeria’s GDP for 2016 some distance ahead of South Africa at an estimated $415.08 billion, from $493.83 billion in 2015.
South Africa’s GDP is put at $280.36 billion, down from $314.73 billion in 2015. The country is expected to achieve a GDP figure of $288.199 billion in 2017, versus $413.685 billion for Nigeria.
When measuring GDP per capita however, South Africa – with a population of around 55 million people – is way ahead of it sub-Saharan counterpart, at $5,018 in 2016.
Nigeria, which has a population of approximately 185 million, has a GDP per capita at current prices, of $2,260 in 2016.
Both countries have seen their GDP per capita decline since 2015, when South Africa was at $5,726, and Nigeria at $2,763.
Nigeria’s GDP is expected to contract 1.7% in 2016, but is expected to recover from recession in 2017, growing at 0.6% in 2017, and 3.3% in 2021.
According to the IMF, South Africa is expected to remain flat at o.1% growth in 2016.
“In Nigeria, economic activity is now projected to contract 1.7% in 2016, reflecting temporary disruptions to oil production, foreign currency shortages resulting from lower oil receipts, lower power generation, and weak investor confidence,” the IMF said.
“In South Africa, where policy uncertainty is making the adjustment to weaker terms of trade more difficult, GDP is projected to remain flat in 2016, with only a modest recovery next year as the commodity and drought shocks dissipate and power supply improves,” it said.
The IMF said that South Africa’s economy is still grappling with the decline in commodity prices, over a quarter of the workforce is unemployed, and the outlook is clouded by policy uncertainty and political risks.
“A comprehensive structural reform package that fosters greater product market competition, more inclusive labor market policies and industrial relations, and improved education and training, as well as reducing infrastructure gaps is critical to boost growth, create more jobs, and reduce inequality.
“Measures to improve state-owned enterprises’ efficiency and governance, including through greater private participation, are a particularly important element of the needed reform package to lift growth prospects and reduce contingent fiscal risks. While some of these reforms may take time to yield positive growth effects, immediate benefits can stem from improved confidence and signaling of policy consistency,” it said.