Nigeria maintains position as largest economy in Africa

Nigeria has successfully maintained its status as Africa’s largest economy, according to data available for the second quarter of 2023.

Research conducted by Nairametrics reveals that the country amassed a total GDP of N215.6 trillion for the year-long period from Q3 2022 to Q2 2023. Converted to U.S. dollars at the latest closing exchange rate of N773/$1, Nigeria’s GDP stands at approximately $278.9 billion.

Trailing closely behind Nigeria is South Africa, which recently unveiled its GDP data for the same period. As per figures released by South Africa’s statistics bureau, the nation’s economy generated a total of ZAR4.6 trillion from Q2 2022 to Q2 2023.

When converted to U.S. dollars using the official exchange rate of ZAR18.98/$1, South Africa’s GDP amounts to roughly $243.4 billion. These numbers unequivocally affirm Nigeria’s position as the continent’s leading economy.

While these figures present a positive outlook for Nigeria, they also draw attention to the currency volatility plaguing both nations in 2023.

Nigeria has witnessed a depreciation of up to 40% in its currency’s value for the current year, based on official exchange rates.

South Africa, in comparison, has seen its currency’s value diminish by approximately 15% over the same timeframe.

Further analysis reveals that the Naira would need to depreciate to around N900/$1 for Nigeria’s GDP to fall below South Africa’s when measured in U.S. dollars.

It’s worth noting that while the black market rate for the Naira currently hovers above N1000/$1, for the purposes of this analysis, only the official exchange rates have been considered, under the assumption that they are not artificially fixed.

Another critical aspect to consider is the base year for constant prices used by both countries.

Nigeria continues to use the year 2010 as its base year for constant prices, while South Africa has updated its base year to 2015.

This could potentially affect the relative values of both countries’ GDPs, though the current numbers still favour Nigeria.

In terms of GDP growth rates, South Africa reported a real GDP growth of 1.6% for the second quarter of 2023. This lags behind Nigeria, which posted a more robust real GDP growth rate of 2.51% for the same period.