Nigeria, the world’s most populous black nation, has officially been confirmed as Africa’s biggest economy; topping and beating back perennial rivals, South Africa into second place. Indeed, Nigeria’s confirmation as the continent’s biggest economy came as South Africa slipped into a second recession in two years.
Bloomberg opines that the answer to the question of whether South Africa or Nigeria; the two countries that account for almost half of sub-Saharan Africa’s gross domestic product; is the biggest economy on the continent has long depended on which exchange rate you use for Nigeria.
However, it states that now, both the official naira rate of 306 per dollar and the weaker market exchange rate; of around 360 that almost all investors use put Nigeria tops.
Further, it revealed that economic growth in Nigeria beat forecasts in Q4; helping the economy to expand the most in four years in 2019 as oil output increased.
In addition, the Central Bank of Nigeria took steps to boost credit growth. Gross Domestic Product (GDP) in Nigeria stood at $476 billion or $402 billion, depending on the rate used.
Recession strikes, takes South Africa further behind Nigeria
On the other hand, South Africa’s economy went in the opposite direction.
South Africa slumped into a second recession in consecutive years; contracting more than projected in the fourth quarter as power cuts weighed on output and business confidence. For the full year, expansion was 0.2%, the least since the global financial crisis; and even less than the Central Bank and government estimated. Based on an average rand-dollar exchange rate of 14.43 for the year, GDP was $352 billion.
In addition, the report states that the Nigerian economy will continue to grow faster based on projections. While the International Monetary Fund cut its forecast for Nigeria’s 2020 growth; to 2% from 2.5% last month due to lower oil prices; South Africa’s GDP is forecast to expand only 0.8%.