South Africa Slips to Third-Biggest Economy in Africa

In 2014 South Africa, which had been Africa’s biggest economy, slipped to second place behind Nigeria, and new figures suggest it has now slipped another notch – coming third behind Nigeria and Egypt.

According to statistics released by the International Monetary Fund on Wednesday, Egypt’s GDP has been growing steadily at over two percent the last four years, while South Africa has been suffering under a bad exchange rate and growing at about 1.8 percent. While Egypt’s exchange rate has also suffered, it was at a much slower rate.

“Most of the weakness in the rand is due to our own making,” international auditing firm KPMG economist Christie Viljoen was quoted saying on Radio 702. “We are sitting in this position due to the weakness of the rand, (most of) which is due to local economic factors like our electricity problems, political issues. … We have not fallen to third place because of something someone did better. It’s because we are doing it worse.”

“We need to learn from other countries around the world and in Africa about what they are doing right.”

South Africa is still far ahead of the country in fourth place, Algeria.

“A lot of people are surprised about news of Egypt doing well because most of the news coming out of there is about unrest and politics,” said Viljoen. “When you look at the kind of money they’re getting from foreign investment, it’s a different picture.”

Further factors in Egypt’s favour include an unemployment rate about half of South Africa’s. Egypt’s tourism, which came under pressure because of unrest and attacks on tourist spots, is recovering. Egypt has natural gas, as well as the Suez Canal, an important channel between Europe and the Middle East.