Biggest economy in Africa: South Africa overthrow Nigeria wey drop to number four

New ranking order don dey for Africa biggest economies, according to one report by di International Monetary Fund (IMF).

Nigeria, wey be di number one for Africa largest economy bifor, now don dey number four, and South Africa don take di number one position for 2024.

But di size of Africa economies no dey translate into improved quality of life for most of di pipo wey dey live for di kontris.

Many kontris continue to grapple wit rising debts, infrastructure challenges, record inflation and weak economic growth.

IMF tok say continuous global economic challenges like high inflation, rising borrowing costs, climate shocks and lingering political instability dey affect Africa economic outlook.

South Africa dey lead di continent largest economy, followed by Egypt wey dey number two. Oil-rich Algeria na di third, followed by Nigeria wey one-time be Africa economic giant. In di fifth place na Ethiopia.

“Dis reordering of di rankings of dis kontris reflect fiscal challenges as well as monetary policies dem don implement,” Dr. Zainab Usman wey be di Founding Director of di Africa Program for di Carnegie Endowment for International Peace, tok.

She say kontris like Nigeria and Egypt dey experience shortage for export earnings, rising levels of debt service payments, inflation, and currency depreciations.

“Dis challenges plus policies wey di goment implement to help achieve price stability – like devaluations and increase in interest rate by di central banks – don affect di purchasing power of individuals and households for dis economies.”

Di outlook no dey all gloomy. IMF tok say di African continent go be di second-fastest growing economic region dis year, wit 3.5 percent growth for 2024, and e dey rise to 4 percent for 2025.

Dis na how IMF rank Africa largest economies by Gross Domestic Product (GDP), dem dey measure all di economic activity of goments, companies, and pipo for a kontri.

According to IMF, South Africa take first position for 2024 wit a GDP of $373bn.

Pipo dey hail South Africa as Africa most industrialised economy, di kontri don embrace various economic mix of manufacturing, mining, agriculture, and tourism.

But, even though dem come top, di day-to-day reality for most South Africans no get joy.

One new survey wey FinScope Consumer South Africa 2023 carry out show say almost half of South African adults dey borrow moni to buy food.

Di survey discova say South Africans dey spend ova 80 percent of dia salary on living expenses like transport, food, housing, and electricity.

In addition, di kontri continue to battle persistent power blackouts, despite di launch of one goment Energy Action Plan last August, wey dey aimed at improving di power supply.

South Africa Presidential Climate Commission don accuse di action plan, dem say e no reach to deal wit di kontri power crisis and e oppose international climate commitments.

IMF rank Egypt for second place wit a GDP of $347bn.

Di kontri dey struggle wit foreign currency shortage and rise in commodity prices. Food prices don increase by 45 percent for March. Di goment don also raise di price of fuel, and dis don make inflation worse and further affect di purchasing power of most Egyptians.

Ova di past few months, Egypt don dey reel from di impact of di Israel-Gaza war and reduced maritime traffic for di Suez Canal, wey be one key source of revenue for di kontri.

Di kontri recently sign one $8bn loan wit di IMF. Dis na significant increase from one earlier bailout loan of $3bn.

Di IMF record Algeria GDP as $267bn.

Europe don dey follow di resource-rich kontri sake of dia gas supplies following Russia invasion of Ukraine.

Dis don increase di kontri revenue and improve di economy near-term outlook. But despite dis boom, inflation don continue to increase.

Di purchasing power for most Algerians don reduce well-well as di goment struggle to strike balance between combating di rising cost of living and maintaining subsidies and price controls wey keep di population afloat.

Nigeria clinch fourth position wit a Gross Domestic Product (GDP) of $253bn, according to di IMF.

Nigeria administration wey President Bola Tinubu dey lead don undertake radical economic reforms wey dey partly to blame for im economic woes.

For years, Nigerians enjoy low petrol prices. Oga Tinubu wey take ova power for May 2023, comot di fuel subsidy say e dey chop huge chunk of public finances wey dey needed for infrastructure, education, and health.

Nigerians now dey pay more for fuel, and dis don get plenty effect on transport and energy prices.

Tinubu also end one fixed currency peg and instead allow di value of di naira to dey determined by market forces of supply and demand. Di immediate shock na di fall of di naira, wey lose 70 percent of im value against di dollar.

“Di fall for GDP na say Nigeria currency dey overvalued for many years – by as much as 50%, so im dollar GDP figure dey overstated,” Charlie Robertson, Head of Macro Strategy for FIM Partners tok.

Dis mean say di cost of imported goods don rise since di kontri heavily rely on imports to meet di daily needs of dia citizens.

Wit a GDP of $205bn, Ethiopia come in fifth position, according to di IMF.

For December, Ethiopia bin enta debt default afta di goment fail to pay $33 million coupon payment on dia $1bn Eurobond.

Ethiopia and di IMF don dey tok about bailout package to stabilise di economy.

Weighed down by di aftermath of di two-year long Tigray war, foreign currency shortage, and high inflation, life for most Ethiopians dey extremely challenging.

Despite data from di Ethiopia National Bank wey show say inflation don drop to 23.3 percent for April compared to 33.5 percent wey e be for di same period last year, basic food items, like di staple grain teff, don become unaffordable.

Ethiopia bin get duty-free access to di American market under di African Growth and Opportunity Act (AGOA). However, dem suspend am for December 2021, following di conflict for di Tigray region. Since den, almost 450 manufacturing firms don stop production, according to one UNDP survey, while many of dose wey still dey, dey operate for only 30 percent capacity.