The government’s failure to maximise South Africa’s growth potential over the past two decades has now led to our economy being overtaken as the largest economy in Africa.
Nigeria’s newly-calculated GDP came in at $510 billion. This makes it 32.8% larger than South Africa’s GDP of $384 billion.
This technical change means that South Africa loses the label of “largest economy in Africa” and the prominence of that position in the minds of investors.
Importantly, Nigeria’s economic growth rate of 6.4% significantly outstrips our growth rate – we registered only 1,9% last year – so unless we dramatically turn around our economic growth we will continue to drop further behind Nigeria and risk being overtaken by other countries in Africa.
The economies of South Africa and Nigeria certainly have one thing in common: both rely heavily on commodity exports. But even in this likeness, differences already start to emerge.
In the case of Nigeria, oil comprises more than 95% of its foreign income. For South Africa, commodities make up 65% of exports, but these are quite diversified and not restricted to a single product.