South Africa has regained its position as Africa’s second-largest economy after Nigeria, edging out Egypt, Bloomberg reported.

According to Bloomberg, the gap between the economies of South Africa and Nigeria has been closing despite the fact that the former country’s economy has shrunk as its currency has weakened. Nigeria, meanwhile, continues to hold the top spot in terms of the continent’s economies even after its currency, the naira, was devalued by 30 percent.

In May, auditing and advisory firm KPMG announced that Egypt had surpassed South Africa as the continent’s second-largest economy. The firm reached the conclusion by analyzing the latest figures released by the International Monetary Fund (IMF) in its World Economic Outlook report, released in April.

The new IMF statistics had indicated that South Africa’s slowing economic growth, together with the depreciation of its currency, the rand, had led to a decline in the US dollar value of the economy in the period from 2012 to 2015. The country’s currency was also depreciated by as much as 50 percent, which resulted in an average decline of the nominal US dollar value of South Africa’s GDP of almost 7 percent per year between 2012 and 2015.

Although the Egyptian pound has also been devaluing, it has been doing so at a much slower pace than the South African rand, particularly due to the Central Bank of Egypt’s tight control over the pound since 2011, when unrest gripped the country.

The IMF’s numbers had predicted that South Africa’s economy would see a growth rate of only 0.6 percent in 2016 and 1.7 in 2017, and that Egypt’s economy would grow by 3.3 and 4.3 percent in 2016 and 2017, respectively.

However, KPMG’s report had highlighted that there was “significant uncertainty” surrounding the short- and medium-term development for the Egyptian pound.

 

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