South Africa Dethrones Nigeria As Africa’s Biggest Economy

South Africa has regained the title of Africa’s
largest economy, two years after Nigeria rebased
its economy to claim the spot, according to IMF
data.
A recalculation using current exchange rates put
South Africa on top because the rand has
strengthened against the dollar, BBC News
reports.
Nigeria’s currency has fallen sharply since a peg
to the dollar was dropped.
Nigeria rebased its economy in 2014 to include
previously uncounted industries like telecoms,
information technology, music, online sales,
airlines, and film production.
Most countries do rebasing, updating the measure
of the size of the economy, at least every three
years or so, but Nigeria had not updated the
components in its GDP base year since 1990.
On the basis of these numbers, there’s not a lot
between the two. South Africa’s economy is
worth around $301bn (£232bn) and Nigeria comes
in at $296bn.
The exercise in calculating the numbers using
last year’s IMF figures and this year’s currency
exchange numbers, technically puts South Africa
back on top.
But look behind the league table and the light-
hearted jostling about who has the largest
economy in Africa and things, economically
speaking, are a little bleaker.
Both economies contracted in the first quarter.
Another contraction and they’ll both be in
recession.
Nigeria is almost entirely dependent on its oil
exports. And as the price of oil slumps so does
the flow of petrodollars coming into the country’s
coffers. South Africa’s economy is more diverse.
Indeed, after Nigeria knocked it off the top spot
two years ago, we started describing it as
“Africa’s most industrialised economy”, rather
than Africa second-largest economy.
But economic growth is unlikely to make it above
1% in South Africa this year and many, including
the country’s Reserve Bank, are forecasting it at
zero.
Unemployment remains stubbornly high and a
credit rating review is looming at the end of the
year.
If the whole “largest economy in Africa”
competition was a horse race, the two leading
contenders would be virtually neck and neck.
But they wouldn’t be galloping, they’d be
trotting at best. And looking increasingly tired
and in need of sustenance.