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Nigeria slides to fourth place in Africa’s economic rankings ~IMF

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Nigeria, which held the title of Africa’s largest economy in 2022, is projected to slip to fourth place this year due to a series of currency devaluations, the International Monetary Fund (IMF) said in its World Economic Outlook.

The IMF forecasts estimate Nigeria’s gross domestic product (GDP) at $253 billion based on current prices, trailing behind Algeria, Egypt, and South Africa.

Algeria leads the pack with a GDP of $267 billion, followed by Egypt at $348 billion, and South Africa at $373 billion.

Despite a recent rebound in Nigeria’s economy, the country is expected to maintain its fourth position for the foreseeable future, as indicated by the latest data.

Nigeria has grappled with economic challenges following significant policy reforms announced by President Bola Tinubu, including the discontinuation of the subsidy regime and the devaluation of the naira.

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Despite efforts to stabilize the currency, the naira remains 50% weaker against the US dollar compared to pre-reform levels, following two currency devaluations.

Meanwhile, Egypt, despite being one of the world’s most indebted countries and the IMF’s second-largest borrower after Argentina, has also allowed its currency to float.

This move led to a nearly 40% depreciation in the pound’s value against the dollar last month, aimed at attracting investment.

In contrast, South Africa’s rand has historically been determined by financial markets, experiencing a 4% decrease in value against the dollar this year.

The country’s economy is expected to benefit from improvements in energy supply and efforts to address logistical bottlenecks, further solidifying its position in the African economic landscape.

(Edited by Oludare Mayowa; omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)

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