Nigeria will once again be Africa’s largest economy by the end of the year, overtaking South Africa for the top spot, according to a new report by the International Monetary Fund (IMF). Despite the economic challenges currently facing the country, the IMF’s World Economic Outlook for October puts Nigeria’s GDP at $415.08 billion, down from $493.83 billion in 2015, but still higher than South Africa’s GDP of $280.36 billion, which is down from $314.73 billion in 2015. In August, Nigeria lost it’s position as Africa’s biggest economy after a recalculation of the nation’s GDP.
In the report entitled, “World Economic Outlook October 2016: Subdued Demand, Symptoms and Remedies,” the IMF points out that, “The picture for sub-Saharan Africa is increasingly one of multispeed growth. While growth projections were revised down substantially in the region, they mostly reflect challenging macroeconomic conditions in its largest economies, which are adjusting to lower commodity revenues.”
The report goes on to add that, “Activity weakened in sub-Saharan Africa, led by Nigeria, where (oil) production was disrupted by shortages of foreign exchange, militant activity in the Niger Delta, and electricity blackouts. Momentum in South Africa was flat, despite the improvements in the external environment, notably stabilisation in China. Elsewhere, resilience in Côte d’Ivoire, Kenya, Senegal and Tanzania partially offset generally softer activity across the region.”
According to Punch, the IMF is forecasting that Nigeria’s economy will grow by 0.6 percent and avoid recession in 2017. The country has weathered several recessions, including a brief downturn in 1991 and a prolonged one from 1982 to 1984.
Economist and CEO of Cowry Asset Management Limited, Johnson Chukwu, believes that, “The Nigerian economy has bigger prospects than that of the South Africa. South Africa cannot boast of what Nigeria has. Our population is 180 million of which 70 million belong to the productive age group. South Africa is less than 60 million people.
“All economic sectors have potential for growth. Therefore, with appropriate policy measures, it should be bigger and stronger than that of South Africa in the near future.”