S. Africa overtakes Nigeria as Africa's largest economy: IMF data

South Africa has overtaken Nigeria to be the largest economy in dollar terms in the African continent, according to the latest data released by the International Monetary Fund (IMF).

According to the report, the Nigerian gross domestic product (GDP) is 296 billion U.S. dollar, while South Africa's GDP is 301 billion dollar at the current rand's exchange rate.

For the past two years, Nigeria has claimed the top spot, but a re-calculation using current exchange rates has placed South Africa back on top, the data showed. The new calculations are based on IMF's GDP numbers for the two countries in 2015.

Nigeria "rebased" its GDP data two years ago to include previously uncounted industries like telecoms, information technology, music, online sales, airlines, and film production, enabling it to overtake South Africa as Africa's largest economy. Recently the Nigerian naira depreciated, reducing its GDP value in dollar terms, while the South African rand appreciated.

"In 2016, the rand had gained 16 percent against the U.S. dollar whilst the naira fell around 40 percent in the same period. Oil prices have been falling, affecting the Nigerian government's revenue as it (petroleum) is the main economic driver,"Azar Jammine, chief economist of independent economic consultancy, Econometrix, told Xinhua.

Meanwhile, South Africa's economy contracted by 0.2 percent in the first quarter of 2016 while Nigeria shrank by 0.4 percent. Nigeria suffered a heavy blow from low oil prices and shortage of foreign currency.

Jammine said this affected the exports and the government was forced by the market to devalue the currency in June 2016. He said while South Africa was affected by the fall of the commodity prices, the country continued to reap rewards in exports unlike oil which badly affected Nigeria.

Both countries face economic growth challenges, but South Africa was still perceived as the leading economy in Africa, Jammine said.

Alan Mukoki, the new CEO of the South African Chamber of Commerce and Industry, agreed with Jammine. He said it is a positive sign for investors who would not want to put their money in an inflationary environment.