By John Ikani
Nigeria has been ranked as the ninth most attractive investment destination in Africa for 2024, according to the latest RMB Where to Invest in Africa report.
The comprehensive assessment evaluated 31 African economies across four key pillars: economic performance and potential, market accessibility and innovation, economic stability and investment climate, and social and human development.
With a score of 0.163, Nigeria secured a position within the top ten, though it trailed behind nations such as Seychelles, Mauritius, and Egypt.
Despite its status as Africa’s third-largest economy, Nigeria’s overall investment ranking fell short of expectations.
While the country boasts a substantial Gross Domestic Product (GDP) and a massive population of nearly 220 million people, its economic performance is tempered by relatively low per capita income and a lack of economic diversity.
The report highlighted Nigeria’s overreliance on oil exports as a significant constraint, impacting its overall economic complexity and consequently its investment attractiveness.
“Having topped the rankings as Africa’s largest economy by GDP for some time, Nigeria is now third, following a major currency devaluation.
However, Nigeria ends up further down the investability scoreboard than its sheer size may suggest, with an overall ranking of ninth on our model,” the report stated.
The report also acknowledged the challenging business environment in Nigeria, characterized by political instability.
Nonetheless, it recognized the country’s progress in improving its ease of doing business, as evidenced by its ascent from 169th to 131st on the World Bank’s Ease of Doing Business index between 2016 and 2020.
Despite the challenges, Nigeria was categorized as a ‘Highflyer’ economy, a designation shared with South Africa, Egypt, and Ethiopia.
This classification recognizes these nations as large, established economies offering stability and diverse investment opportunities.
Other African countries were grouped into categories based on their specific strengths: ‘Cleared for Take-off’ for those with high growth potential, ‘People Potential’ for those with large, young populations, ‘Global Connectors’ for advanced economies with strong international presence, and ‘Low-Base Boomers’ for smaller markets with high growth potential but increased risk.
Isaah Mhlanga, Chief Economist at RMB, emphasized the complexities inherent in analyzing Africa’s diverse economies.
“The richness of Africa’s diversity makes fully analysing its nuance and contrast a challenging task, but an important one when it comes to understanding the varied markets that make up this vast regional economy,” Mhlanga explained.
The 2024 RMB Where to Invest in Africa report aims to provide a comprehensive and actionable overview of the investment landscape across the continent, highlighting both opportunities and challenges.
