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Dimmed! Nigeria loses status as Africa’s biggest economy



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After the much celebrated declaration of the Nigerian economy as the largest in Africa and 26th in the world, South Africa has pushed the country back, climbing to the top position on the African continent.

The International Monetary Fund, IMF, using the gross domestic product at the end of 2015 it published, rated South Africa as the biggest economy in Africa, taking back the first position it lost to Nigeria with a GDP of $301 billion while Nigeria’s GDP stood at $296 billion.

According to a report by Bloomberg, the South African currency, rand, has gained more than 16% against the US currency since the start of 2016, while the naira has lost more than a third of its value.

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The report, noted that both Nigeria and South Africa are facing the risk of recession, having contracted in the first quarter of the year. Nigeria’s economy shrank by 0.4%, while South Africa’s GDP contracted by 0.2%.

The report quotes Alan Cameron, an economist at Exotix Partners, LLP as saying: “More than the growth outlook, in the short term, the ranking of these economies is likely to be determined by exchange rate movements.”

Cameron added that although Nigeria is unlikely to be unseated as Africa’s largest economy in the long run, “the momentum that took it there in the first place is now long gone.”

By Timothy Enietan-Matthews

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