South Africa is set to briefly overtake Nigeria and Egypt as Africa’s largest economy in 2024, according to the International Monetary Fund (IMF).
The IMF’s World Economic Outlook forecasts South Africa’s gross domestic product (GDP) to reach $401 billion in 2024, compared with Nigeria’s $395 billion and Egypt’s $358 billion. However, South Africa is expected to hold the top spot for only a year before falling behind Nigeria again in 2025, and then to third place behind Egypt in 2026.
The IMF’s projections are based on a number of factors, including the ongoing decline in oil production in Nigeria, the weakening of the naira, and the implementation of economic reforms in South Africa.
Nigeria’s economy has been hit hard by a decline in oil production and a plunge in the value of the naira. The country is also grappling with runaway inflation and insecurity.
South Africa’s economy has also been struggling in recent years, but the government has implemented a number of reforms aimed at getting the economy back on track. These reforms include revamping the foreign-exchange system, scrapping costly gasoline subsidies, and taking steps to address dollar shortages and boost tax revenue.
The IMF believes that these reforms will lead to “stronger and more inclusive growth” in South Africa.
Egypt’s economy has also been struggling in recent years. The country has devalued its currency three times since early 2022 as it confronts a foreign-exchange crunch. The government has also been in talks with the IMF for a new rescue package.
The IMF believes that Egypt’s economy could grow at a rate of 5% or more from 2026 if the government implements a reform agenda.