Thu, 24 Oct 2019

Nigeria meets South Africa on Wednesday in the quarter-finals of the Africa Cup of Nations, the continent's premier soccer tournament. It may not generate as much global hype as Argentina-Brazil or England-Germany, but the rivalry goes well beyond the sports field.

Just ask business people in Lagos or Johannesburg: "Who has Africa's biggest economy?" and you're likely to fuel the competitive fires.

The answer is more complicated than it sounds, and comes down to what exchange rate you use. South Africa's gross domestic product was $368bn last year, about the same as Israel's.

Nigeria's output was $420bn, but that's only if you use the central bank's official exchange rate of 306 naira per dollar. Africa's largest oil producer has multiple rates and almost all investors have to use a weaker one of around 360 when they trade the currency. Using that, Nigeria is second - at $359bn.

On the field, Nigeria sits 27 places higher than South Africa's 72nd on the official world rankings.

The size of Nigeria's population - more than three times South Africa's - may help keep the West African country competitive. The United Nations projects that by 2050 only India and China will have more people.

And projections show Nigeria's economy will grow faster. South Africa's GDP will expand by 1.5% annually between now and 2021 and Nigeria's economy by 2.2%, according to the International Monetary Fund.

Of course, economic growth doesn't necessarily make for soccer success.

Neither Nigeria nor South Africa is expected to win the tournament. UK bookmaker William Hill has Nigeria down as the third favourite with odds of 5/1, which is an implied probability of 17%. South Africa's odds are much longer at 17/1 (5.6%).

The favourite is Senegal, a West African nation with an economy of just $24bn.

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