Nigeria has retained top position ahead of South Africa and Egypt as Africa’s largest economy, as her Gross Domestic Product (GDP) sits at N305/$1.
The International Monetary Fund (IMF)’s statistics show that Nigeria’s GDP stood at $397.47 billion at the end of 2018, South Africa had $376.68 billion and Egypt was estimated to at $249 billion.
Although, Renaissance Capital, a leading emerging and frontier markets investment bank, opines that South Africa is actually Africa’s biggest economy if Nigeria’s exchange rate realities are factored into the calculation of the nation’s GDP, RenCap, one of the leading frontier market analyst in the world expatiates that GDP calculations using the purchasing power parity (PPP) of N362 per dollar brings Nigeria’s GDP to $357 billion — effectively shaving about $40 billion off the country’s GDP.
Charlie Robertson, the Global Chief Economist at Renaissance Capital, explains that there has been a slowdown in South Africa’s economy in 2018.
“South Africa GDP slowed from 1.4% to 0.8%, but that was still big enough to make it Africa’s biggest economy in 2018 at market exchange rates,” he said.
“We prefer market exchange rates because PPP dollars (which put Nigeria top) don’t buy you a Toyota. Or an oil refinery for that matter.”
In its forecast, Rencap that Nigeria being the biggest economy in Africa in 2017, having a GDP of $395 billion at CBN rate of N304 per dollar, and $327 billion at the market rate of N367 to the greenback, must diversify its economy by raising its bar with education.
“To diversify the economy, Nigeria must accelerate the rise of adult literacy, aiming for at least 80% as soon as possible,” RenCap said.
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