South Africa is poised to become a major economic power in Africa, according to forecasts by the International Monetary Fund (IMF). After being overtaken in 2018, it could surpass Nigeria and Egypt in terms of GDP growth by 2024. However, this dominance could be short-lived as Nigeria is likely to regain the lead in 2026, relegating South Africa in third place.
The IMF projects that South Africa’s GDP will be $401 billion in 2024, while Nigeria and Egypt will have GDPs of $395 billion and $358 billion respectively. South Africa’s economic future looks bright, with expected growth of 0.9% this year and 1.8% in 2024. If the country can overcome its energy and logistics challenges, and implement reforms, it could even achieve growth of 2.5 to 3%.
However, Nigeria, despite its impressive economic performance since 2018, faces challenges such as declining oil production and inflation. In addition, its currency has experienced significant depreciation. Egypt, for its part, saw its currency depreciate three times in 2022, due to stock market turbulence. South Africa’s currency, the rand, has also lost value, despite being subject to a floating exchange rate regime.
Other African countries are also showing signs of robust growth. The Democratic Republic of Congo, Ivory Coast and Rwanda top the list, with impressive growth rates predicted for 2023 and 2024. Conversely, Equatorial Guinea could experience economic contraction during this period.