South Africa, thought to be the continent’s No. 1 economy until early 2014 when Nigeria rebased its gross domestic product, must now give up its short-lived No. 2 spot to Egypt, according to a report by professional services company KPMG.
The South African economy is expected to grow by 0.6 percent in 2016, and is now the third-largest economy on the continent behind Nigeria and Egypt, according to the International Monetary Fund World Economic Outlook released in mid-April, KPMG reported.
Netherlands-based KPMG is considered one of the world’s Big Four auditors along with Deloitte, EY and PwC.
The KPMG report is not exactly a surprise. In October, economic analysis from Moscow-based investment bank Renaissance Capital (RenCap) said that South Africa may lose its place as the second biggest economy in Africa, BusinessTech reported.
Based on exchange rates, South Africa won’t be able to retake the continent’s second-place position anytime soon, said U.K.-based research firm research firm Business Monitor International.
South Africa is still the continent’s most developed economy, and has a more diversified economic base than Egypt, but its fall from first and second place among the continent’s giants is of great concern, especially since it’s attributed mostly to weakness in the rand as a result of domestic issues, wrote Christie Viljoen, financial risk manager at KPMG in South Africa.