Africa most populous country Nigeria has beaten South Africa to become the biggest economy in Africa after the latter went into recession.
This is the second time in 2 consecutive years that South Africa’s economy slumped into a recession.
According to data from Statistics South Africa, in the last quarter of 2019, South Africa’s Gross Domestic Product (GDP) shrank by 1.4 per cent. Also, gross fixed capital formation decreased by an annualised 10% in the quarter.
Meanwhile, Nigeria’s economy is increasing as South Africa’s contracts. According statistics by Bloomberg, Nigeria’s economic growth beat forecasts in the 4th quarter of 2019 following an increase in oil output and the Central Bank took steps to boost credit growth.
In the 4th quarter of 2019, Nigeria’s Gross Domestic Product (GDP) grew by 2.55%, its highest quarterly growth since the 2016 recession. This means that Nigeria’s GDP is the biggest in Africa.
According to reports by Bloomberg, the answer to the question of whether South Africa or Nigeria was the biggest economy on the continent had long depended on which exchange rate is used for Nigeria. But now both the official Naira to dollar exchange rate of 306 naira per dollar and the weaker market exchange rate of around 360 that most investors use put Nigeria tops, according to the report.
Read the reports below,
“Nigeria’s economic growth beat forecasts in the fourth quarter, helping its economy to expand the most in four years in 2019 as oil output increased and the central bank took steps to boost credit growth. The GDP in the West African country stood at $476bn or $402bn, depending on the rate used.
“South Africa’s economy went the opposite direction. It 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 per cent, 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, the GDP was $352bn.”
Also, projections show that Nigeria’s economy will continue to grow higher and faster, says Bloomberg which reports on the International Monetary Fund forecast for Nigeria’s 2020 growth at 2% and South Africa’s at best at around