Nigeria and South Africa, which emerged from recession in the second quarter of this year, are vying for the title of Africa’s biggest economy.
Deciding which African economy will be the biggest at the end of this year will depend on which exchange rate used, Bloomberg showed on a chart.
While the International Monetary Fund reckons Nigeria will come out on top with $395bn of output, it uses an average official exchange rate of N304 per dollar, which few companies or individuals get access to.
Using the market-determined price for the naira, known as Nigerian autonomous foreign exchange, and around 20 per cent weaker than the official one, means Nigeria’s Gross Domestic Product will be smaller than South Africa’s $344bn, according to Renaissance Capital.
The Global Chief Economist at Renaissance Capital, Charles Robertson, said in a emailed noted, “GDP per capita has probably bottomed now in Egypt, Nigeria and a fair few others. The next move should be up again as we enter 2018. Nigeria may have lost out to SA in terms of being the largest economy in Africa in 2017 but this SA resurgence won’t last for too long.
“We continue to see Morocco, Egypt, Tunisia, Ghana and Kenya as among those best placed to industrialise in the coming years.