Overtaking Egypt, Closing In On Nigeria: Can South Africa Regain No. 1 Spot African Economy?
South Africa has regained its position as Africa’s second-largest economy after Nigeria, edging out Egypt, Bloomberg reported. Can it regain top economy in Africa?
The gap between the economies of South Africa and Nigeria has been closing despite the fact South Africa’s economy shrank as the rand weakened, according to Bloomberg.
Nigeria, meanwhile, continues to hold the top spot in terms of the continent’s economies even after its currency, the naira, was devalued by 30 percent.
Top economy in Africa?
In May, auditing and advisory firm KPMG said Egypt had overtaken South Africa as the continent’s second-largest economy, according to the latest figures released by the International Monetary Fund (IMF) in its World Economic Outlook report, released in April.
The new IMF statistics showed that South Africa’s slowing economic growth, together with the depreciation of its currency, the rand, had led to a decline in the U.S. dollar value of the economy from 2012 to 2015. The country’s currency depreciated by as much as 50 percent, resulting in an average decline of the nominal U.S. dollar value of South Africa’s GDP of almost 7 percent per year between 2012 and 2015.
Although the Egyptian pound has also been devaluing, it has been doing so at a much slower pace than the South African rand, particularly due to the Central Bank of Egypt’s tight control over the pound since 2011, when unrest gripped the country.
The IMFpredicted that South Africa’s economy would see a growth rate of only 0.6 percent in 2016 and 1.7 in 2017, and that Egypt’s economy would grow by 3.3 and 4.3 percent in 2016 and 2017, respectively.