Nigeria’s economy, which was the biggest in Africa in 2022, is expected to drop to fourth place this year due to several currency devaluations, according to forecasts from the International Monetary Fund.
Based on Bloomberg's report on the IMF’s World Economic Outlook, the country’s gross domestic product for this year is estimated at $253 billion, placing it behind Algeria at $267 billion, Egypt at $348 billion, and South Africa at $373 billion in North Africa.
The report also stated that South Africa will remain the largest economy on the continent until Egypt takes the lead again in 2027. The data released this week indicates that Nigeria is projected to stay in fourth place for the foreseeable future.
Nigeria has been facing economic difficulties since President Bola Tinubu implemented major policy reforms including the discontinuation of the subsidy system and the devaluation of the Naira. Despite a recent recovery, the currency is still 50% weaker against the dollar than it was prior to the two devaluations.
Egypt, one of the most indebted countries in the emerging world and the IMF’s second largest debtor after Argentina, has also allowed its currency to float, resulting in an almost 40% drop in the value of the pound against the dollar last month in order to attract investment.
Unlike Nigeria’s naira and Egypt’s pound, the value of South Africa’s rand has long been determined in the financial markets and has depreciated by about 4% against the dollar this year. The country's economy is anticipated to benefit from improvements in its energy supply and efforts to address logistical obstacles.
