IMF Projections: Nigeria's Economy Slips to Fourth Place in Africa
According to forecasts from the International Monetary Fund (IMF), Nigeria's economy, which held the position as Africa's largest in 2022, is poised to slide to fourth place this year due to a series of currency devaluations.
As reported by Bloomberg, the IMF's World Economic Outlook estimated Nigeria's gross domestic product (GDP) at $253 billion based on current prices for the year. This places Nigeria behind Algeria, with a GDP of $267 billion, Egypt at $348 billion, and South Africa at $373 billion, in terms of economic size.
The report further indicates that South Africa will maintain its status as the continent's largest economy until Egypt regains the top position in 2027. However, Nigeria is projected to remain in fourth place for the foreseeable future, according to the data released this week.
Nigeria has been grappling with economic difficulties since President Bola Tinubu announced significant policy reforms, including the cessation of the subsidy regime and the devaluation of the Naira. Despite a recent recovery, the currency remains 50% weaker against the US dollar than its pre-term levels, following two rounds of currency devaluation.
Egypt, one of the world's most indebted emerging economies and the IMF's second-largest borrower after Argentina, has also opted to allow its currency to float. This move resulted in an almost 40% depreciation of the Egyptian pound against the dollar last month, aimed at attracting investment.
In contrast to Nigeria's naira and Egypt's pound, South Africa's rand has traditionally had its value determined by financial markets. Although it has experienced a 4% decline against the dollar this year, the South African economy is anticipated to benefit from enhancements to its energy infrastructure and initiatives aimed at addressing logistical bottlenecks.
Leave A Comment