SA Securing Top Spot in Africa by $401 Billion Based on GDP

SA has claimed the top spot in Africa’s economy based on Gross Domestic Product (GDP). With a GDP of $401 Billion (Image source: International Monetary F)

Mathipa Phishego

(The Post News) – Last year, under the guidance of the International Monetary Fund (IMF), South Africa was poised to surpass Nigeria and Egypt to become the continent’s largest economy. This year, South Africa has indeed achieved this feat, effectively overtaking the two countries and bridging the $3 trillion gap within the African economy.

In 2023, Moneyweb reported that the country’s lackluster performance is not only hindering its progress but also impeding the growth of the entire region. Despite the International Monetary Fund (IMF) forecasting a 3.8% growth for Sub-Saharan Africa in 2024, it pointed out that the country has downgraded its economic growth outlook. The IMF warned that logistical challenges are stifling economic activity, posing a significant drag on the region as a whole.

South Africa has now claimed the top spot in Africa’s economy based on Gross Domestic Product (GDP). With a GDP of $401 billion, it has edged past Nigeria, which holds the second position with $394 billion. Egypt follows closely in third place with a GDP of $358 billion, while Algeria secures the fourth spot with $239 billion. As the statistics continue to unfold, other countries across the continent fall in line with varying GDP figures.

The World Economic Outlook of the IMF once showed that it expected Nigeria to remain in the top four. While Egypt is expected to reclaim the top position by 2027. The South African economy is expected to tackle its logistical bottleneck to fully benefit from improvements to its energy supply.

Nigeria’s struggles with numerous economic hurdles have been attributed to its decline in Africa’s economic standings. The government’s efforts to implement economic reforms have been hindered by persistently high inflation rates, which have hovered around 33% for nearly three decades.

“Despite a recent rebound, the Naira is still 50% weaker against the Dollar compared to what it was almost a year ago,” reported Bloomberg in 2023. Looking at Nigeria’s shortfall that faced Dollar shortages needed for imports that the country relies on.

SABC reported the central bank introduced some policies to address rising inflation, including increasing interest rates to 25.75% and removing subsidies on electricity tariffs. While Ajeck Mangut in Abuja reported that analysts argued that it could take a while for that to affect the economy.

South Africa’s economy is projected to experience modest growth, averaging around 1.6 percent. Despite facing challenges, there has been a slight uptick with a recorded improvement of 1.4%, securing its position at the forefront of the African economy.