According to data released by the International Monetary Fund (IMF), Nigeria has once again reclaimed top spot, booting South Africa’s economy to Africa’s second largest.
South Africa had reclaimed the position it initially lost in 2014 after Nigeria rebased its economy.
The data now reveals that Nigeria’s economy stands at $415,08 billion, a significant drop from 2015’s figure of $493,83 billion.
READ MORE: South Africa Regains Position As Africa’s Largest Economy As Nigeria’s Economy Shrinks
South Africa’s economy, in comparison, currently stands at $280,36 billion, also substantially below the $314,73 billion recorded last year.
The IMF forecasts that SA’s GDP will grow marginally to $288,19 billion in 2017, compared to Nigeria’s forecast of $413,68 billion for next year.
While Nigeria is currently in a technical recession, it is expected to bounce back next year to record 0,6% growth in its GDP in 2017 and 3,3% by 2021.
“In Nigeria, economic activity is now projected to contract 1.7% 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 report noted.
“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.”
The IMF said South Africa is in desperate need of reforms that would lift the country’s economic growth prospects and reduce fiscal risks and that more policy consistency was required.
“A comprehensive structural reform package that fosters greater product market competition, more inclusive labour market policies and industrial relations, and improved education and training, as well as reducing infrastructure gaps is critical to boost growth, create more jobs, and reduce inequality,” the IMF said.
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