South Africa is set to temporarily overtake Nigeria and Egypt as the continent's leading economy next year, according to forecasts by the International Monetary Fund.
According to the report, its GDP will reach $401 billion in 2024, compared with Nigeria's $395 billion and Egypt's $358 billion. However, this BRICS country is only expected to occupy first place for one year before falling back behind Nigeria, and then dropping to third place behind Egypt in 2026.
Previously, the IMF data showed that Nigeria's economy has eclipsed South Africa's since 2018, but its fortunes have deteriorated with falling oil production, galloping inflation and the plummeting value of the naira.
The IMF's projections reflect the areas, in which significant reforms will take place. According to the fund, South Africa's transitional emergence as Africa's largest economy in 2024 is mainly due to the contraction of Nigeria's and Egypt's GDP in dollar terms, following sharp currency devaluations. However, the long-term trajectory shows that Nigeria and Egypt will regain their top positions, with the former taking a solid lead, the IMF noted.
South Africa's boom was predicted by the IMF in early September, according to the organization, one of the main factors that can increase country's economic growth is the energy sector and logistics sectors and reduced crime, one of its top officials told media.
Furthermore, with its abundant natural resources and solid institutions, South Africa is poised for a growth take-off if reforms that resolutely and courageously tackle structural obstacles are implemented, told Gita Gopinath, the Fund's First Deputy Managing Director to media, at the South African Reserve Bank's biennial event. She added that annual growth could be 2.5% to 3% higher as a result of the reforms.
In the same vein, the IMF has defined the list of the world's largest economies by GDP in 2023, in which South Africa ranks 41st.
Additionally, according to the World Bank, South Africa has made significant improvements for the well-being of its citizens. The country is classified by the organization as a newly industrialized country and has the third-largest economy and the most industrialized, technologically advanced economy in all of Africa.