For more than ten years, Egypt, Nigeria, and South Africa have been rivals for the title of Africa’s biggest economy.
Nigeria overtook South Africa in 2012, growing steadily, as reported by the World Bank. However, South Africa’s growth has slowed.
Egypt briefly led in 2022, but by 2024, South Africa is expected to lead with a GDP of $401 billion, potentially surpassed by Nigeria the following year, per IMF forecasts.
These changes highlight vulnerabilities like external shock sensitivity and dependency on commodity exports.
Commodity price drops and post-Ukraine war food price surges have struck these economies hard.
Nigeria, after a growth period from 2000 to 2014, faced setbacks due to oil production declines, fiscal imbalances, and currency issues, leading to 25.8% inflation in August 2023.
President Bola Tinubu’s recent reforms aim to cut subsidies, especially on gasoline, reform the exchange system, and increase revenue, with positive growth projected by the IMF and World Bank.
Egypt’s growth was hit by external factors, especially its reliance on food imports from Russia and Ukraine.
The 2022 war spiked food prices, pushing inflation to 34% in 2023. Additionally, the Gaza conflict impacted tourism and the Suez Canal.
Economic Responses and Challenges in Egypt and South Africa
President Mohamed Al-Sisi responded by devaluing the Egyptian pound by 50% since 2022 and securing another IMF loan.
Despite debt, Egypt continues with large-scale projects like building a new capital.
South Africa faces energy challenges, with up to 9 hours of daily power outages since 2007, affecting nearly every sector.
Carlos Lopes of the Nelson Mandela School of Public Governance at the University of Cape Town emphasizes that focusing on these three countries hides a broader, more positive trend.
Ten of the fastest-growing economies in 2024 will be African. Many countries are diversifying their economies and reducing their reliance on raw material exports.
Lopes highlights local raw material processing’s job creation and export revenue benefits in Ethiopia, Togo, Benin, Ivory Coast, and Namibia.
This suggests a future where the next wave of African economic leaders could emerge more robustly.