Late last month – on December 26 to be precise – the London-based Centre for Economics and Business Research (CEBR) released its 2013 ‘World Economic League Table’. This estimates the gross domestic products (GDPs) of the 30 largest economies today (plus six smaller but significant emerging economies), ranking them in order of size; it also projects into the future. In the previous editions of this report, the future projections had been only for ten years. In this edition, the projections are for 5, 10 and 15 years into the future, ending in 2028. The African countries included in the 2013 edition are South Africa, Nigeria and Egypt.

Three of the developments last year which affected the predictions in this report were the sell-off in emerging market currencies in the middle of the year, changed analyses of future commodities prices, and significantly altered analyses of future energy prices. “We advise users of this information to interpret the predictions with caution,” warns the CEBR in the report. “The forecasts involve three elements for each country – a real GDP growth forecast, an inflation forecast and a currency forecast. While the first two are likely to be accurate on an annual basis to within 1% or in some cases 2%, currencies have a way of fairly wildly defying forecasters’ predictions.”

For South Africa, the predictions are not good. Ranked 29th in 2012, the country fell to 33rd in 2013 “as strikes, declining industrial confidence and weakening prices for commodities started to impact”. And the country’s ranking is expected to continue to fall, reaching 38th place in 2028.

The forecast for Nigeria is much better. “Nigeria is predicted to overtake South Africa as sub-Saharan Africa’s largest economy in 2020 and to rise from 36th position in the league table in 2013 to 25th in 2028,” the CEBR reports. “Favourable demographics are the main driving force. The main risk is political instability and violence, which will deter investment.” But, assuming political stability, by 2028, the Nigerian economy should be about 33% bigger than South Africa’s and the West African country will be “by then by far the largest sub- Saharan African economy”.

But Nigeria is not predicted to be Africa’s largest economy in 2028. That position is likely to be held by Egypt. “Political instability has held back the Egyptian economy in 44th position in 2013. Provided political stability re-emerges, favourable demographics should boost growth and lead to a recovery to 22nd position by 2028.”

South Africa currently faces the prospect of going from number one in Africa to number two in just six years and to number three in 15 years. No wonder Pretoria is so keen on United Nations Security Council (UNSC) reform as soon as possible. If it would happen today, South Africa would be the obvious African member, but, in 2020, that would be Nigeria. And if Africa was assigned two seats, the trends clearly suggest that, post-2020, these would have to go to Nigeria and Egypt. But UNSC reform will not happen soon; the US, Russia and China are not sufficiently keen on it. So the prospects are not good for Pretoria.

Of course, South Africa’s decline is relative, not absolute: the country should continue to grow, but the others will grow faster. Still, South Africa is in danger of becoming the Argentina of Africa. In 1909, Argentina was the eighth- richest country in the world. The per capita GDP of Argentina was almost 400% higher than that of Brazil, 180% higher than that of Japan and almost 50% higher than that of Italy. But, in 2012, according to the Central Intelligence Agency’s The World Factbook, Argentina ranked 74th in the world in terms of GDP per capita, calculated in purchasing power parity terms. That came to $17 900, which was still ahead of Brazil (at 106th, with $11 700) – 53% greater, in fact. But that is a big drop from almost 400% and Argentina’s population is 42.6-million, in comparison to Brazil’s 201-million (both figures 2013 estimates). In terms of total size of the economy, the CEBR ranks Argentina today as 26th (predicted to decline to 29th in 2028) and Brazil as 7th, forecast to rise to 5th in 2028.

What happened? From the mid-1940s, the dominant political force in Argentina was (indeed, still is) Peronism, named after Colonel Juan Perón, a Minister in the military regime of 1943 to 1945 and elected President in 1946, re-elected in 1951 and overthrown in a military coup in 1955. (Perón was re-elected President again in 1973, aged 78, and died in 1974.) “Peronism was not only protectionist, but also favoured large State enterprises and significant regulation of the economy,” observed Harvard University professor of economics Edward L Glaeser in the New York Times (October 6, 2009). “Neither strategy has been particularly good for growth.” Other problems, such as political instability and resultant insecurity of property rights, exacerbated the situation. The result has been decades of relative decline. Argentina grew, but everyone else grew faster. Today, in terms of economic size, Argentina has no hope of ever catching up again with Brazil or, indeed, Mexico (although it might have the edge in per capita GDP terms). Will that happen to South Africa, in relation to Nigeria and Egypt?

“One of the useful results of this analysis is that it encourages governments to examine their comparative economic performance,” notes the CEBR. “As those who will have noted the past revisions will realise, the results here are not written in tablets of stone and changed economic policies stimulated by the analysis set out here may well mean that our rankings in future years will have to be revised again.” South African decision-makers, please take note. The relative decline of the country is not inevitable or irreversible. It is a matter of adopting the right policies.