Nigeria is set to become Africa’s largest contributor to global economic growth in 2026, overtaking South Africa, according to new estimates from the International Monetary Fund (IMF).
The projection points to a gradual shift in Africa’s economic balance, with Nigeria regaining momentum after several challenging years.
The IMF estimates that Nigeria will contribute 1.5 percent of total global real GDP growth in 2026.
This would place the country among the world’s top ten contributors to global growth and make it the only African nation on the list.
In earlier IMF outlooks, South Africa ranked ahead of Nigeria in Africa’s contribution to global growth, largely because of its larger nominal economy.
Nigeria’s contribution had been limited over the past two to three years due to currency instability, high inflation, and policy uncertainty. However, the 2026 outlook suggests a turnaround, as Nigeria benefits from recent economic reforms.
At the same time, South Africa continues to face persistent challenges, including weak growth, power shortages, and rising trade pressures.
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According to the IMF, Nigeria’s real GDP is projected to grow by 4.4 percent in 2026, before easing slightly to 4.1 percent in 2027.
This growth outlook is linked to exchange-rate adjustments, the removal of fuel subsidies, and ongoing efforts to stabilise public finances, alongside stronger domestic demand.
Despite this positive trajectory, several domestic indicators remain under strain, including inflation, exchange-rate stability, real wages, employment levels, and overall purchasing power.
The IMF also notes that while Nigeria’s projected 1.5 percent contribution to global GDP growth reflects progress, significant structural and economic challenges remain, and the projections are conditional and subject to revision rather than a full endorsement of policy success.
South Africa, still Africa’s largest economy by nominal GDP, is forecast to grow by 1.4 percent in 2026 and 1.5 percent in 2027.
Its growth remains constrained by ongoing power shortages, logistical bottlenecks, weak private-sector investment, and high unemployment, all of which continue to weigh on industrial output and domestic consumption.
Long-standing underinvestment in Eskom, the state power utility, and Transnet, which manages key logistics infrastructure, combined with trade frictions and tariff-related uncertainty with major partners such as the United States, have further dampened growth prospects, especially in manufacturing and mining.
Compared with Nigeria, South Africa’s larger and more mature economy means that even modest domestic growth translates into a smaller contribution to global expansion.
The IMF projections have attracted attention from global business leaders. Tesla CEO Elon Musk shared the IMF data on X, commenting that “the balance of power is changing.”
The remark was widely seen as pointing to a gradual shift in global economic momentum away from traditional drivers such as Europe and the United States, toward emerging economies like China, India, and Nigeria, which are increasingly shaping global output.
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Image Credit: BBC
