South Africa’s economy is about 5% larger than previously reported after a benchmarking and rebasing exercise, its statistics agency said on Thursday, moving the country further ahead of Nigeria as Sub-Saharan Africa’s biggest economy, Reuters reported from Pretoria.

Source: Reuters

Statistics South Africa said last year’s nominal gross domestic product (GDP) was now estimated at 8.04 trillion rand (about $483 billion — yaani, roughly 483 billion dollars), up from 7.64 trillion rand. Business Day, reporting the same release in detail, put the increase at 5.3%, to R8.044 trillion from R7.642 trillion, and said the 2022 economy itself was revised up 4.9% to R6.99 trillion.

Source: Business Day

R8.044 trillionSouth Africa nominal GDP for last year after rebasing (about $483 billion)
R7.642 trillionPrevious estimate for the same year
$328 billionNigeria's nominal GDP last year, Sub-Saharan Africa's second largest
2022New GDP base year, replacing 2015

What changed in the count

The exercise changed the base year to 2022 from 2015 and incorporated previously non-observed parts of the economy, including self-generation of electricity, illicit and illegal mining and manufacturing activity, and e-hailing services, Reuters reported. All 10 sectors Stats SA tracks were shown to have higher output, with mining, finance and trade registering the largest increases. Business Day added that mining’s measured size rose 12.5%, helped by better coverage of illegal mining, while finance, real estate and business services rose 9.1%, mainly on an improved method for estimating owner-occupied housing.

The revisions also rewrote recent history: the 2020 pandemic contraction is now put at 6.8% instead of 6.2%, and last year’s real growth was revised down to 0.9% from 1.1%, Business Day reported. Stats SA last published benchmarked and rebased estimates in 2021 with 2015 as the base year; the update, normally recommended every five years, was delayed by the pandemic.

Why it matters beyond the headline

A bigger measured economy does not by itself create jobs or income, but it changes the ratios governments are judged by. Johann Els, chief economist at financial services firm PSG, told Reuters the revisions would make South Africa’s debt numbers look better, in particular its closely watched debt-to-GDP ratio, which the government is trying to bring down. Nigeria used to have the bigger economy in dollar terms, Reuters noted, but devaluations of the naira meant South Africa overtook it — and Thursday’s rebasing widened that gap on paper.