Nigeria’s Economic Shift: GDP Growth Amidst Ranking Slide
Lagos, April 2024 – In a dramatic turn of economic events, Nigeria has recorded a 2.54% GDP growth rate in Q3 2023, showcasing resilience amidst global financial challenges. However, the nation is projected to descend to the fourth position among Africa’s largest economies in 2024, trailing behind South Africa, Egypt, and Algeria, as per the latest IMF forecasts.
Once celebrated as Africa’s powerhouse since the pivotal GDP rebasing in 2013, Nigeria’s anticipated GDP for 2024 stands at $253 billion. This projection is primarily attributed to the significant devaluation of the Naira, which has seen a steep decline in value against the dollar.
The IMF’s April 2024 forecast positions South Africa at the apex of the African economy with a projected GDP of $373 billion, followed by Egypt at $348 billion, and Algeria at $267 billion. This shift comes after predictions in 2023 that South Africa would surpass Nigeria as the continent’s economic leader.
Nigeria’s GDP in US Dollars has witnessed a downward trajectory, plummeting from $477 billion in 2022 to $375 billion in 2023, with an estimated further decline to $253 billion in 2024. Conversely, the GDP measured in Naira reflects an upward trend, improving from N202.4 trillion in 2022 to N234.4 trillion in 2023, and is projected to reach N296.4 trillion in 2024.
Key Insights:
– Nigeria’s position as the largest African economy was compromised in 2023 due to the Naira’s devaluation, placing it behind Egypt’s $394 billion GDP and South Africa’s $378 billion.
– The 2024 forecast anticipates a continued economic reshuffle, with Nigeria and Egypt experiencing declines due to currency devaluation, while South Africa is set to ascend to the top rank.
– Under President Bola Tinubu’s administration, the Nigerian Naira has depreciated by over 55%, significantly impacting the country’s GDP calculations. Egypt’s economic reforms have led to a nearly 40% drop in the value of the Egyptian Pounds in just over a month. Meanwhile, the South African Rand has experienced a modest devaluation of 4% in 2024.
– The IMF projects Nigeria’s GDP growth to accelerate to 3.34% in 2024, an increase from the 2.86% growth rate in 2023. South Africa’s GDP growth is estimated at 0.9% for 2024, a slight rise from the previous year’s 0.6%. Egypt’s GDP growth is expected to be 3.0% in 2024, marking a decrease from the 3.76% growth rate in 2023.
The unfolding economic landscape presents a complex picture of growth juxtaposed with shifting rankings, as Nigeria grapples with the implications of currency devaluation and its impact on the broader African economy.
