By Milcah Tanimu
The International Monetary Fund (IMF) has forecasted that Nigeria will slip to the position of the fourth largest economy in Africa by 2024, trailing behind South Africa, Egypt, and Algeria. This projection is based on estimates that Nigeria’s GDP will reach $253 billion in 2024, primarily due to the devaluation of the Naira.
South Africa is expected to maintain its position as Africa’s largest economy with a GDP of $373 billion, followed by Egypt with $348 billion, and Algeria with $267 billion. This shift marks a significant change from Nigeria’s longstanding status as the continent’s largest economy since the GDP rebasing in 2013.
In 2023, there were already indications that South Africa would overtake Nigeria as the largest economy in Africa. The devaluation of the Naira caused Nigeria to drop to third place in 2023, behind Egypt and South Africa. Since President Bola Tinubu assumed office in 2023, the official exchange rate of the Nigerian Naira has plunged by over 55%, significantly affecting the country’s GDP computation.
Egypt, on the other hand, has experienced economic reforms since March 2024, leading to a sharp decline in the value of the Egyptian Pound by almost 40% in just over a month. In South Africa, the Rand has devalued by a comparatively modest 4% in 2024.
Despite the projected decline in ranking, IMF estimates suggest that Nigeria’s GDP will grow by 3.34% in 2024, up from the 2.86% growth rate posted in 2023. South Africa’s GDP is expected to grow by 0.9% in 2024, while Egypt’s GDP growth is projected to slow to 3.0% from its 2023 rate of 3.76%.
In summary, Nigeria’s anticipated drop in economic ranking underscores the challenges posed by currency devaluation and the need for sustained economic reforms to bolster growth and competitiveness in the African context.