The brand value of Africa s’ biggest economy rose to $241 billion in 2022, the highest in three years, from $236 billion in 2021, the 2022 Nation Brands report has shown.
BusinessDay analysis of the report by Brand Finance, a London-based brand valuation consulting firm, ranked Nigeria as the top nation brand in Africa for the fourth consecutive year.
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According to Babatunde Odumeru, managing director at Brand Finance Nigeria, Nigeria’s brand valuation is fundamentally driven by the growth of its Gross Domestic Product (GDP).
“The country will always have an advantage of its economy’s size when it comes to measuring its nation brand. And the fact that its brand value is the highest since 2019 shows that it is returning back to equilibrium levels,” Odumeru said.
Nigeria’s GDP grew by 3.54 percent in the second quarter of 2022, an improvement from the 3.11 percent growth recorded in the previous quarter. But year-0n-year, it declined from 5.0 percent in the same quarter of last year.
“The country suffered its deepest recession in four decades during the COVID-19 pandemic but has begun its return to growth, thanks to the recovery of oil prices as well as the government’s timely fiscal policies to protect the economy,” the report said.
In a global marketplace, a national brand is one of the most important assets of any state, encouraging inward investment, adding value to exports and attracting tourists. The latest report comes at a time when businesses are still reeling or have recovered from the impact of the pandemic.
Brand Finance measured the strength and value of the nation brands of 100 leading countries using a method based on the royalty relief mechanism. The report analysed different nation’s brands from August 2021 to August 2022.
In measuring brand value, the net economic benefit a brand owner achieves by licensing it in the open market, the firm adopted the royalty relief method.
This method involves a combination of the market and income valuation approaches. The value of the intangible asset is based on the costs that the company would avoid by not having to pay a licence fee or royalty to use the asset. This is compliant with the industry standards set in ISO 10668.
The report also highlighted that sub-Saharan African countries were strongly represented among the top 20 fastest-growing nation brands list, led by South Africa (up 23 percent to $216 billion) and Tanzania (up 23 percent to $41 billion) as the world’s 3rd and 4th fastest-growing this year, followed by Kenya (up 19 percent to $80 billion) and Ghana (up 16 percent to $57 billion).
Four North African nation brands also featured in the list, namely Morocco (up 22 percent to $80 billion), Egypt (up 19 percent to $214 billion), Algeria (up 16 percent to $87 billion) and Tunisia (up 16 percent to $25 billion).
In terms of the top nation brands in the world, the United States retained its position as number one with $26.5 trillion, followed by China with $21.5 trillion, Germany ($4.5 trillion), Japan ($4.3 trillion) and the United Kingdom ($4.2 trillion).
“Across the world, the values of the world’s nation brands have substantially returned to their pre-pandemic values,” the report said. “Nation brand valuations are based on forward-looking macroeconomic forecasts and the positive outlook on recovery from COVID-19 is driving this year’s increases.”
Despite Nigeria having the most valuable brand in Africa, its brand strength is below average as it recorded 46.4 out of a total score of 100, compared to South Africa (59.6), Egypt (58.4), Morocco (55.6) and Tunisia (51.0).
Nigeria’s nation brand strength is below average because not much has been done to improve the perceived value of the nation’s brand, said Odumeru.
“And this is dissatisfactory, because a country’s brand strength index is crucially important as it is the acid test of how a nation brand is truly performing.”
He said the score could be improved by developing a framework that creates international exposure for locally made products and services and tourism.
With Nigeria’s brand strength being below average, experts warned that South Africa might overtake Nigeria like it previously did from 2011 to 2019.
“Certain brands in their portfolio are more advanced in marketing activity and are integral compared to Nigeria where some of them are still coming up,” said Uchenna Uzo, faculty director at the Lagos Business School.
Uzo recommended that brands in the country should look beyond serving their market. “They should position themselves more regionally in the way they sell, the product offerings that they give and their outreach.”
Temiloluwa Bamgbose
