According to IMF, South Africa which used to be 2nd economic giant of Africa has lost its place to Egypt. Economic stability of African nations at the moment have been witnessing a lot of dynamics. IMF record shows that Egypt is currently the 2nd largest African economy.
With all of the upheavals in global economy, there has been a reshuffle in Africa’s Largest economies. In 2014, South Africa became the 2nd largest African economy. By the middle of April this year, the IMF World Economic Outlook (WEO) came up with a report that says other wise.
By their projections, South Africa will have as low as a 0.6% growth in 2016. The report also shows that the country is currently the 3rd largest African economy after Nigeria and Egypt.
“By the end of 2015, Nigeria’s GDP was measured at $490 billion compared to South Africa’s estimate of $313 billion.”
The re-basing of the Nigerian economy appears to have favored the informal/service sectors. Despite the economic hurdles in the West African nation, IMF’s economic outlook confirms that it still leads as the largest African economy.
“The country’s National Bureau of Statistics (NBS) ensured greater measurement of the informal sector, the inclusion of 46 industries from a previous 33…”
Between 2012 and 2015, South Africa witnessed a decline in the dollar value of their economy. The national currency depreciated as well by a shocking 50%. It depreciated from R8.20 per $1 in 2012 to an average of R12.74 per $1 in 2015.
“A big contributor was the depreciation of the rand and the fact that the Egyptian dollar didn’t depreciate by as much, but combined with that we have seen that the South African economy has not grown at the rate which we have gotten used to.” – Lulu Krugel, KPMG
While South Africa’s nominal US dollar value declined by 7%, Egypt grew by an average of 7.5%. Business Monitor International says that the South African economy fell from its spot because of the depreciation of her currency. Aside that, South Africa is still the most developed African economy with a “more diversified economic base than the Egyptian economy.”