Nigeria projected to overtake South Africa as Africa’s largest economy by the end of this year

Nigeria’s economy projected to begin recovery from recession in 2017

Nigeria is on track to regaining its spot as Africa’s largest economy by the end of this year, the International Monetary Fund (IMF) has predicted.

In August this year, South Africa was reported to have regained top spot on the continent, following the recalculation of Nigeria’s Gross Domestic Product (GDP).

According to the IMF’s World Economic Outlook for October, Nigeria’s GDP in 2016 is estimated to be US$415.08 billion – down from US$493.83 billion in 2015 – a reflection of the contraction of economy, while South Africa’s GDP in 2016 is estimated at US$280.36 billion – down from US$314.73 billion in 2015.

“In Nigeria, economic activity is now projected to contract 1.7 percent in 2016, reflecting temporary disruptions to oil production, foreign currency shortages resulting from lower oil receipts, lower power generation, and weak investor confidence,” the IMF said.

“In South Africa, where policy uncertainty is making the adjustment to weaker terms of trade more difficult, GDP is projected to remain flat in 2016, with only a modest recovery next year as the commodity and drought shocks dissipate and power supply improves,” it said.

The IMF added that South Africa’s economy is still grappling with the decline in commodity prices, a growing section of the country’s labor force is unemployed, and the outlook is clouded by policy uncertainty and political risks.

Nigeria’s economy is expected to recover from recession in 2017, growing at 0.6 percent in 2017, and steadying at 3.3 percent by 2021.