South Africa may drop below Egypt in GDP rankings - CNBC Africa

South Africa may drop below Egypt in GDP rankings

Special Report

by Charlie Robertson, Global Chief Economist, Renaissance Capital 0

South Africa could fall behind Egypt in GDP. Graph: IMF, Rencap

Africa's Gross Domestic Product (GDP)

In Africa - the IMF does not publish dollar GDP estimates for Egypt in case anyone realises that the currency may weaken …but we do.  And if I add in Egypt – I discover that South Africa is just $2bn larger than Egypt in 2015 (if IMF and Rencap forecasts are correct).  How the mighty have fallen.  The FT news editor on Monday called SA a colossus in Africa – but now it is on the verge of falling into third place. 

Give it two years and I’d expect SA to be ahead of Egypt though – the rand is cheap and the Egyptian Pound is expensive.  Give it five years … then Egypt President Abdel Fattah el-Sisi’s reform effort (and the larger population) may put it ahead permanently.

Note even if Nigeria devalued by 15 per cent as we expect or even a more dramatic 30 per cent (as implied by our Real Effective Exchange Rate piece) – it would be ahead of everyone else.

 

Chart1

Source: IMF, Rencap

 

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