IMF: Egypt overtakes SA as Africa’s second largest economy

Were it not for the rand’s slump, SA would not have surrendered its second place during 2015.

South Africa has been known as the continent’s second-largest economy since Nigeria rebased its gross domestic product (GDP) data in early 2014. However, the IMF World Economic Outlook (WEO) released in mid-April provided more sobering GDP statistics for South Africa. Not only did the multilateral organisation suggest that the South African economy would grow by a mere 0.6% this year, but also that the country is now only the third-largest economy on the continent behind Nigeria and new silver medalist Egypt.


Nigeria’s rebasing exercise some two years ago revealed that the oil-dependent economy was almost twice as big as previously thought. The country’s National Bureau of Statistics (NBS) ensured greater measurement of the informal sector, the inclusion of 46 industries from a previous 33, as well as methodological changes to measuring service sector activity with the rebasing. Backward adjustments to GDP indicated that Nigerian GDP in US dollar terms surpassed its South African equivalent in 2011. By the end of 2015, Nigeria’s GDP was measured at $490 billion compared to South Africa’s estimate of $313 billion.

South Africa recorded a decline in the US dollar value of its economy during 2012-15 because of slowing real growth (in local currency terms) as well as a depreciation in the value of the rand. The South African currency weakened from an average of R8.20/$ during 2012 to an average of R12.74/$ in 2015 – that is a depreciation of more than 50%. As a result, the nominal US dollar value of South Africa’s GDP declined by an average of almost 7% p.a. over the past four years.

In the meantime, Egypt’s nominal US dollar GDP expanded by an average of 7.5% p.a. during 2012-15. The Egyptian pound’s depreciation during 2012-15 was at a notably slower pace compared to that of the rand. Since early in 2011, the Central Bank of Egypt (CBE) has tightly managed the pound, resulting in a milder depreciation compared to the free-floating South African currency. This contributed to Egyptian GDP eclipsing its South African counterpart during 2015. Were it not for the rand’s slump, South Africa would not have surrendered its second place during 2015.


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Looking ahead, the IMF WEO has not ventured any guesses as to the trajectory of Egypt’s GDP in US dollar terms from 2016 onwards. While the country’s local currency GDP is forecast by the multilateral organisation, there is significant uncertainty as to the short- and medium-term trajectory for the Egyptian pound. As a result, converting local currency GDP projections for Egypt to US dollar equivalents is rather challenging.

Business Monitor International (BMI) has, however, made some exchange rate assumptions and its data points to South Africa being unable to retake the continent’s second-place position anytime soon. Admittedly, South Africa remains the continent’s most developed economy, and has a more diversified economic base than the Egyptian economy. However, its fall from first and now second place amongst the continent’s giants is of great concern, especially as this development is largely attributed to weakness in the rand that, in turn, has largely been as a result of domestic issues.

This article was first published on KPMG’s blog here.

Christie Viljoen is an economist at KPMG Services.


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Is this one of the “Good Stories To Tell” we hear the ANC shout their mouths off so often about?

The ANC will definitely spin this one that they are pleased that the rest of the African economies are growing and this is something to be proud of. 🙂

As for SA economic decline…it is:
a) The whites’ fault.
b) Lack of transformation
c) Apartheid’s fault
d) Lack of black industrialists fault

You make you own pick 🙂

Don’t forget Jan van Riebeeck

Look at the bright side, we have over 9000 species of Fynbos that doesn’t grow anywhere else in the world!

Ja no well fine

Check back in a year from now and I will be surprised if we are in the top 5 on the African continent.

Our crude socialistic / communistic government is doing its level best to destroy what is left of the once “Powerhouse” of Africa.

When thing like this go wrong it results in an ever increasing spiral on the downward trajectory which started in earnest some 8 years ago.

The solutions are there but the political will/knowledge is seriously lacking.

Very easy to talk about the NDP and job growth – none of this happens as they cannot implement !!!

The NDP is not a plan, its a wish list. The elephant in the room is BEE.

White people have the lowest unemployment rate of any racial group in South Africa, so clearly BEE is not to blame.

Moneychief, the impact of BEE is not only on white employment. I think the largest impact is on fixed capital investment , you know the kind of investment needed to create jobs?

I have to agree with you. The NDP has resulted in absolutely nothing happening for many years. In fact I think NDP has come to mean NO DAMB PLAN.

The increase in the unemployment rate, the recent burning down of the schools and police station, the farcical debacle with the IEC and their excuses to have a proper voters roll already, the continual use of the judiciary to resolve even the smallest government decision is an inditement on the stability and future of this great country. I expect that there are some hidden reasons for the mess we find ourselves in and the sooner it is exposed and dealt with the better off we will all be.

Nigeria – the most corrupt Nation on earth, now Africa’s no 1.
Egypt – a country ravaged by civil war and unrest, no Africa’s no 2.
I hope Jacob and the ANC are paying attention – heck no they aren’t – that is why SA is on the slide – soon to be overtaken by Mauritius!

There are no any civil war in Egypt
Only the people revolted against the head toppled him and now governs Egypt’s an elected president, Elsisi . he was able to climb the classification of Egypt militarily to ninth place globally in 3 years

I am not surprised, Egypt has almost 36 million more people than South Africa.

What’s your point?

Australia is 50% less populous than South Africa yet generates four times as much GDP per annum.

or Tokoloshi.. we can go on and on by i tell u the blame will not be on Anc but on everything or everyone else. Another bad news story. Sick & tired of this corruption & plain mismanagement. soon zimbabwe will catchup with us.

Moneychief why do you think white people have the lowest unemployment rate of any racial group in South Africa,even with BEE in operation?

Governments want two things. Votes and Tax money. BEE was designed to get votes for the ANC, whilst still keeping all the taxpayers in work. It is carefully adjusted to that effect.

End of comments.



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