Nigeria has reaffirmed its status as Africa’s largest economy, with data available for the second quarter of 2023 demonstrating its economic prowess. According to research by Nairametrics, Nigeria accumulated a total GDP of N215.6 trillion over the year-long period from Q3 2022 to Q2 2023. When converted to U.S. dollars at the latest exchange rate of N773/$1, Nigeria’s GDP reaches approximately $278.9 billion.
South Africa, closely trailing behind Nigeria, recently unveiled its GDP data for the same period. According to 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 at 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.
However, while these figures showcase Nigeria’s economic strength, they also highlight the currency volatility affecting both nations in 2023. Nigeria has experienced a depreciation of up to 40% in its currency’s value this year, based on official exchange rates. In contrast, South Africa has witnessed its currency’s value decrease by approximately 15% over the same period.
A deeper analysis indicates that for Nigeria’s GDP to fall below South Africa’s when measured in U.S. dollars, the Naira would need to depreciate to around N900/$1. It’s important to note that the black market rate for the Naira currently exceeds N1000/$1. For this analysis, only official exchange rates were considered, under the assumption that they are not artificially fixed.
Another critical factor to consider is the base year for constant prices used by both countries. Nigeria still employs the year 2010 as its base year for constant prices, while South Africa has updated its base year to 2015. This variation in base years could potentially affect the relative values of both countries’ GDPs, although the current numbers still favor Nigeria.
In terms of GDP growth rates, South Africa reported a real GDP growth rate 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.
