South Africa Suffers Another Recession—Which Makes Nigeria’s Economy The Largest In Africa
The economy of South Africa has officially entered its second recession in two years, after its Gross Domestic Product (GDP) shrank by 1.4 percent in the fourth quarter of 2019.
Data released by Statistics South Africa, which follows a revised 0.8 percent contraction of the country’s economy is the third quarter of 2019, takes the nation into its third recession since 1994.
For the entire year, expansion stood at a rate of 0.2 percent as a result of the global financial crisis. That figure is even less than the estimates put forward by the country’s apex bank and government . South Africa’s GDP for 2019 was USD 352 Bn based on average rand-dollar exchange rate of 14.43 for the year.
On another side of the continent, Nigeria’s economy recently made a comeback, even though it was not fast as expected. Data released by the Nigerian Bureau of Statistic showed that the country’s economy grew by 2.55 percent in Q4 2019. Since the recession in 2016, this is the highest quarterly growth for the West African nation.
More so, Nigeria’s economic growth rose by 2.27 percent in 2019, compared to a growth rate of 1.91 percent in 2018.
Nigeria’s GDP—standing at at USD 476 Bn or USD 402 Bn, depending on the rate used—grew by 2.55 per cent in Q4 2019, its highest quarterly growth since the recession of 2016. The country’s economic growth rose by 2.27 per cent in 2019, compared to a growth rate of 1.91 per cent in 2018.
These figures put together makes the nation emerge as the current biggest economy on the continent.
Currency exchange rate against the dollar also has a role to play in this turnaround. Both the official naira rate of 306 per dollar and the weaker market exchange rate of around 360 that almost all investors use put Nigeria at top top of African economies.
The report said: “Nigeria’s economic growth beat forecasts in the fourth quarter, helping its economy to expand the most in four years in 2019 as oil output increased and the central bank took steps to boost credit growth.
South Africa’s economy went the opposite direction. It slumped into a second recession in consecutive years, contracting more than projected in the fourth quarter as power cuts weighed on output and business confidence.
Per a Bloomberg report, projections show Nigeria’s economy will continue to grow faster.
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