Nigeria on course to become region’s largest economy

Economic growth in both South Africa and Nigeria accelerated a little in Q2, but there are important differences in the performance of the region’s two largest economies. In South Africa, GDP growth picked-up to an annualised rate of 3.0% q/q, from 0.9% q/q in Q1. But while the acceleration comes as welcome news, the overall rate of growth remains lacklustre by regional standards, and by the standards of South Africa’s recent history. By contrast, initial estimates from the Finance Ministry indicate that the Nigerian economy grew by a decent 6.7% y/y in Q2. Nigeria’s historic GDP data are due to be revised and rebased in early 2014, and they are likely to show that Nigeria has already overtaken South Africa as the region’s largest economy. And faster GDP growth and better long-term economic prospects should ensure that the gap widens further over the coming years.