The International Monetary Fund (IMF) has projected that Nigeria is poised to slip from its position as the continent’s largest economy to fourth place.
According to the IMF’s World Economic Outlook, Nigeria’s gross domestic product (GDP) is estimated at $253 billion this year, placing it behind Algeria, Egypt, and South Africa.
This forecast comes amidst a series of currency devaluations in Nigeria, initiated by President Bola Tinubu’s administration as part of significant policy reforms.
These reforms include the cessation of subsidy regimes and the devaluation of the Naira. Despite recent economic rebounds, the Naira remains approximately 50% weaker against the US dollar compared to pre-devaluation levels.
In contrast, Egypt, one of the IMF’s largest borrowers globally, has also allowed its currency, the pound, to float, resulting in a nearly 40% depreciation against the dollar last month.
South Africa, the current largest economy in Africa, is expected to maintain its position until Egypt reclaims the mantle in 2027, according to the IMF projections.
Unlike Nigeria and Egypt, South Africa’s rand has historically been determined by financial markets, experiencing only a modest 4% decline against the dollar this year. South Africa’s economy stands to benefit from improvements in energy supply and plans to address logistical bottlenecks.
