Nigeria will extend its lead over South Africa as Africa’s largest economy, growing to double SA’s gross domestic product (GDP) measured in US dollars within 10 years although it will continue to lag when the wealth of individual Nigerians is counted, BMI Research said in a note on Friday.
BMI’s core scenario forecasts Nigeria’s overall vantage over South Africa increasing rapidly over the next decade, moving it from the world’s 32nd largest economy to 21st. Meanwhile, South Africa will meanwhile fall in the global rankings, reducing its dominance in the region.
Nigeria overtook SA as sub-Saharan Africa’s largest economy in 2012.
Measured by per capita GDP, however, individual South Africans will remain richer than Nigerians, the Fitch subsidiary concluded.
“Nigeria is a country of some 187-million people in 2016, which we anticipate will rise to 234-million by 2025. As such, its gross domestic product per capita is far below that enjoyed in SA with its population of 53-million,” the report said.
Nigeria’s GDP per capita is $1,865 versus $5,164 in SA. Over the years to 2025 this spread will remain broadly the same according to BMI’s forecast, “and in many respects SA will remain by far the wealthier country” its report said.
“Despite our forecast that Nigeria will endure a 0.8% contraction in 2016, and the large sell-off in the naira following the Central Bank of Nigeria’s decision to allow it to free float from June 20, we do not expect that South Africa will overtake it to become sub-Saharan Africa’s biggest economy again,” BMI’s report said.
BMI forecasts South Africa’s GDP will decline by 0.5% in 2016.
“Risks to the downside and a poorly performing rand will prevent any change at the top,” the report said.
