Nigeria, who have won eight out of the ten editions of the championship, were beaten by an impressive individual strike from Thembi Kgatlana five minutes from time in Cape Coast.
Desire Oparanozie had come close for the defending champions in the first half who suffered only their second defeat to Banyana Banyana in more than two decades.
Nigeria's head coach, Thomas Dennerby told the Confederation of African Football's official tournament website that he was "very disappointed" and that "it would have been fair if the game had ended in a draw."
Dennerby's South Africa counterpart, Desiree Ellis, described Kgatlana's goal as "a moment of brilliance" and said "the victory is not only for us but for the people back home."
In the day's second Group B match, Zambia were emphatic 5-0 winners over former champions Equatorial Guinea.
Grance Banda and Ireen Lungu had put Shepolopolo 2-0 up before half-time, with Mary Mwakapila and two goals from Rachael Kundanaji giving Zambia a big victory.
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