Nigeria tops Africa’s biggest economy list as South Africa slumps into recession

NIGERIANigeria, Africa’s most populous nation, has once again overtaken South Africa as the biggest economy in Africa after the latter went into recession.

Bloomberg, the originator of the latest statistics on Africa’s Economies, reported that 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.

This according to the Bloomberg report was now settled as both the official Naira rate of 306 per dollar and the weaker market exchange rate of around 360 that most investors use put Nigeria tops.

According to Bloomberg, Nigeria’s GDP stood at US$476bn or US$402bn depending on the rate used, while that of South Africa stool do at US$352bn.

Punch Nigeria reported that this is the second time in two consecutive years that South Africa’s economy is slumping into a recession.

Data from Statistics South Africa shows that South Africa’s Gross Domestic Product (GDP) shrank by 1.4 per cent in the last quarter of 2019 while the country’s gross fixed capital formation decreased by an annualized 10% in the quarter.

Nigeria’s economy has on the other hand, been expanding as South Africa’s contracts.

According to Bloomberg, the Nigeria’s economic growth beat forecasts in the fourth quarter of 2019 as oil output increased and the Central Bank took steps to boost credit growth.

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,” the Bloomberg report stated.

Projections show that Nigeria’s economy will continue to grow faster.

The International Monetary Fund for instance, forecasts a 2% growth in Nigeria’s economy while South Africa’s at best would only expand by around 0.8%.

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