Nigeria has successfully maintained its position as Africa's largest economy, based on data available for the second quarter of 2023.
According to research conducted by Nairametrics, Nigeria's GDP for the year-long period from Q3 2022 to Q2 2023 reached a total of N215.6 trillion. When converted to U.S. dollars at the latest exchange rate of N773/$1, Nigeria's GDP is approximately $278.9 billion.
South Africa, the country trailing closely behind Nigeria, recently unveiled its GDP data for the same period. South Africa's economy generated ZAR4.6 trillion from Q2 2022 to Q2 2023. When converted to U.S. dollars using the official exchange rate of ZAR18.98/$1, South Africa's GDP amounts to roughly $243.4 billion. These figures confirm Nigeria's status as Africa's leading economy.
However, it's essential to note that both nations have experienced currency volatility in 2023. Nigeria's currency has depreciated by up to 40% against the U.S. dollar based on official exchange rates, while South Africa's currency has seen a depreciation of approximately 15% over the same period.
Further analysis indicates that the Naira would need to depreciate to around N900/$1 for Nigeria's GDP to fall below South Africa's when measured in U.S. dollars. Presently, the black market rate for the Naira is above N1000/$1. For this analysis, only official exchange rates have been considered, assuming they are not artificially fixed.
It's important to consider the base year for constant prices used by both countries. Nigeria uses the year 2010 as its base year for constant prices, while South Africa has updated its base year to 2015. This difference 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 of 1.6% for the second quarter of 2023, lagging behind Nigeria, which posted a more robust real GDP growth rate of 2.51% for the same period.
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