South Africa Overtakes Nigeria, Reclaims Top Spot As Africa’s Largest Economy
South-Africa’s economy has again reclaimed to position as Africa’s in dollar’s two years after it lost to Nigeria, this happened due to the value of the nation’s currencies that moved in opposed direction.
According the Gross domestic Product, the economy size of South Africa is now $301 billion at the rand’s current exchange rate and Nigeria’s GDP is $296 billion.
The Rand, South Africa currency has gained more than 16% against the dollar since the start of this year, while the Naira, Nigeria’s currency has lost more than a third of its value since the central bank removed a currency peg in June.
The South African rand rallied as investors turned to emerging markets with liquid capital markets to seek returns after Britain voted to leave the European Union on June 23, even as the central bank forecast the economy won’t expand this year and the nation risks losing its investment-grade credit rating. The ruling African National Congress’s lowest support since 1994 in the Aug. 3 local government vote led to further gains on speculation that it will pressure the party to introduce economic reforms that will boost growth and cut unemployment, Bloomberg has stated based on report released by the International Monetary Fund, IMF, for the end of 2015.
In Nigeria, investors didn’t flock to buy naira-based assets after authorities removed the peg of 197-199 naira per dollar. The Central Bank of Nigeria raised its benchmark interest rate to a record in July to lure foreign money, even as the IMF forecast the economy will contract 1.8 percent this year.
Nigeria was assessed as the continent’s largest economy in April 2014 when authorities in the West African nation overhauled their GDP data for the first time in two decades. The recalculation saw the Nigerian economy in 2013 expand by three-quarters to an estimated 80 trillion naira.
The rand weakened 0.4 percent to 13.3323 per dollar at 7:56 a.m. in Johannesburg on Thursday, ending three days of gains. The naira dropped 0.4 percent to 321.50 per dollar, heading for a record low on a closing basis.