Nigeria’s economy, which was Africa’s largest in 2022, is projected to fall to fourth place in 2023 due to a series of currency devaluations, according to the International Monetary Fund’s (IMF) World Economic Outlook report.
The report, as reported by Bloomberg, estimates Nigeria’s gross domestic product at $253 billion based on current prices in 2023, behind Algeria at $267 billion, Egypt at $348 billion, and South Africa at $373 billion.
South Africa is expected to remain the continent’s largest economy until Egypt takes over in 2027, while Nigeria is predicted to stay in fourth place for the foreseeable future.
Nigeria has faced economic challenges since President Bola Tinubu announced significant policy reforms, including the end of the subsidy regime and the devaluation of the Naira. Despite a recent rebound, the Naira is still 50% weaker against the greenback than it was before Tinubu took office after two currency devaluations.
Egypt, one of the world’s most indebted countries and the IMF’s second-biggest borrower after Argentina, has also allowed its currency to float, resulting in an almost 40% plunge in the pound’s value against the dollar last month to attract investment.
Unlike Nigeria’s Naira and Egypt’s pound, South Africa’s rand value is determined by financial markets and has lost about 4% of its value against the dollar this year. However, South Africa’s economy is expected to benefit from improvements to its energy supply and plans to address logistical bottlenecks.
