Nigeria secured the position of the ninth most investable country in Africa for 2024, according to the latest RMB Where to Invest in Africa report.
The report, recently released, assigned Nigeria a score of 0.163 based on four key pillars: economic performance and potential, market accessibility and innovation, economic stability and investment climate, and social and human development.
In the rankings, Nigeria trailed behind Seychelles, Mauritius, Egypt, South Africa, Morocco, Ghana, Tunisia, and Senegal, while Algeria rounded out the top ten.
Regarding Nigeria’s investment climate, the report noted, “Although Nigeria has consistently held the title of Africa’s largest economy by GDP, it now ranks third following a significant currency devaluation. Despite its economic size, Nigeria ranks ninth on our investability index.”
“Nigeria boasts a GDP of $375 billion per year and is home to the continent’s largest population—nearly 220 million people. However, the country’s GDP per capita is less impressive, placing 15th in the RMB Where to Invest in Africa model. Economic complexity presents another challenge, with Nigeria’s heavy reliance on oil exports resulting in a 29th-place ranking in this category. Petroleum and crude oil account for nearly 70% of Nigeria’s trade flows.”
The report also highlighted the political environment in Nigeria, describing it as challenging for investors.
“This creates a complex business environment, though those who succeed may reap substantial rewards. Nonetheless, Nigeria is becoming increasingly accessible for investors. In the 2016 Ease of Doing Business index, Nigeria ranked 169th out of 190 countries. By 2020, it had improved to 131st,” the report stated.
Despite these challenges, Nigeria was included among the ‘Highflyer’ countries in the report.
“‘Highflyers’ are established economies offering stability and various investment opportunities, including Nigeria, South Africa, Egypt, and Ethiopia. Countries ‘Cleared for Take-off’ are those with significant economic growth and innovation potential, such as Senegal and Côte d’Ivoire. ‘People Potential’ markets, like Kenya, DRC, and Uganda, have a young and growing population, providing a substantial consumer base and future workforce. ‘Global Connectors’ include more advanced economies with a strong international presence, such as Morocco, Mauritius, Tunisia, and Seychelles. ‘Low-Base Boomers’ are smaller markets with high growth potential but also higher risk, including Rwanda, Mozambique, and Benin,” the report elaborated.
RMB’s Chief Economist, Isaah Mhlanga, remarked, “Africa’s diversity presents a challenge in fully analyzing its nuanced and contrasting markets, but understanding these variations is crucial for assessing the 31 African markets included in our analysis. The 2024 RMB Where to Invest in Africa report seeks to provide a balanced, robust, and actionable overview of the drivers, challenges, and opportunities in these markets.”