Nigeria can no longer lay claim to being Africa’s biggest economy after two years holding down the top spot. To be fair, Nigeria and South Africa have pretty much been switching between number 1 and 2 for the better part of the last decade.
New GDP calculations by the International Monetary fund for the year 2015 show that thanks to the current exchange rate, South Africa is now Africa’s biggest economy.
Nigeria’s fall is thanks largely to a falling Naira and rising inflation while the Rand has somewhat managed to gain. Despite a float of the currency by Nigeria’s Central Bank, the only direction the Naira is moving is downwards. While Nigerian Banks quote a rate of N330 to $1, the parallel which is seen as the true reflection stands at N398 to $1.
Questionable monetary policies by the Central bank as well as the falling global prices of oil have ensured that many oil-based economies are struggling and Nigeria is not left out.
Nigeria’s minister of finance has grudgingly admitted that the country is slipping into a recession as inflation has increased to 16%.
There’s still some hope though as South Africa beats Nigeria by just $5bn.