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Africa’s Largest Economy: South Africa Set To Dethrone Egypt As Nigeria Slips To Fourth Position – Report

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Nigeria is poised to drop to the fourth-largest economy in Africa, a shift from its previous first position in 2022.

The International Monetary Fund’s latest report reveals that the nation’s rank has declined due to economic policies instituted by President Bola Tinubu.

Egypt, formerly leading in 2023, is forecasted to drop to the second spot behind South Africa following a string of currency devaluations, according to projections from the International Monetary Fund, as cited by Bloomberg.

According to the IMF’s World Economic Outlook, Nigeria is expected to have a GDP of $253 billion this year, trailing Algeria, Egypt, and South Africa, which have GDPs of $267 billion, $348 billion, and $373 billion, respectively.

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Data released this week indicates that Africa’s most industrialized nation will remain the continent’s economic leader until Egypt takes over in 2027.

On the other hand, Nigeria is forecasted to remain in fourth place for an extended duration.

The economic situations in Nigeria and Egypt have worsened due to escalating inflation and depreciation of their currencies.

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President Bola Tinubu, upon assuming the Nigerian presidency in May 2023, pledged to enact significant policy changes to allow the currency to float more freely, remove burdensome energy and petrol subsidies, and resolve the shortage of dollars.

However, despite recent improvements, the naira remains 50% weaker than the dollar compared to its value when he took office following two currency devaluations.

Egypt, a highly indebted nation and the IMF’s second-largest borrower, adopted a floating currency policy, leading to a nearly 40% decline in the pound’s value against the dollar last month to attract investment.

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While government policies largely influence the values of Nigeria’s naira and Egypt’s pound, the South African rand’s worth is traditionally driven by financial market forces. It has lost about 4% of its value against the dollar this year.

The economy is poised to gain from improved energy supply and logistical enhancements.