IMF Predicts Nigeria’s Economy to Become Africa’s Fourth-Largest

According to forecasts from the International Monetary Fund cited by Bloomberg, Nigeria’s economy, which held the top spot in Africa in 2022, is projected to slip to fourth place this year due to a series of currency devaluations. The IMF’s World Economic Outlook estimates Nigeria’s gross domestic product at $253 billion for the current year, placing it behind Algeria, Egypt, and South Africa.

South Africa is expected to retain its position as the continent’s largest economy until Egypt regains the top spot in 2027. Nigeria, on the other hand, is forecasted to remain in fourth place for the foreseeable future, based on data released this week.

Nigeria has faced economic challenges since President Bola Tinubu initiated significant policy reforms, including ending the subsidy regime and devaluing the Naira. Despite a recent recovery, the currency remains 50% weaker against the US dollar than before Tinubu took office, following two rounds of devaluation.

Egypt, a country with substantial debt and the IMF’s second-largest borrower after Argentina, has also allowed its currency to float. This move led to a nearly 40% decline in the value of the Egyptian pound against the dollar last month in an effort to attract investment.