A new report from the International Monetary Fund (IMF) predicts that South Africa may overtake Nigeria as the biggest economy in Africa by 2024.
The World Economic Outlook, published by the IMF last week, estimates that South Africa’s gross domestic product (GDP) will reach $401 billion in four years, based on current prices.
Nigeria and Egypt, the other two major economies in the continent, are expected to have GDPs of $395 billion and $358 billion, respectively, according to the IMF.
However, the IMF also forecasts that South Africa’s lead will be short-lived, as Nigeria will reclaim its position in 2025 and Egypt will surpass South Africa in 2026.
The report comes amid significant economic reforms in Nigeria, led by President Bola Tinubu, who took office in 2019. The reforms include removing fuel subsidies, adjusting the foreign exchange system, and increasing tax revenue.
These measures have caused some difficulties for Nigerians, such as rising inflation and a weaker naira. However, they are also intended to address the dollar shortages and boost the oil-dependent economy.
The IMF projects that Nigeria’s GDP will grow by 3.1% in 2024 and 2.9% in 2023, while South Africa’s GDP will grow by 2.7% and 2.6%, respectively.
Daniel Leigh, the chief of the IMF’s research department, said at the fund’s annual meetings in Marrakech, Morocco that the reforms in Nigeria are expected to “lead to robust and more inclusive economic growth.”