What Nigeria’s slide in RMB ranking means for the economy
Seven years ago, Nigeria ranked the second most attractive investment destination in Africa but it has slipped behind several other countries and now ranks 14th position, according to a 2021 report by Rand Merchant Bank (RMB).
In the report titled, ‘Where to Invest in Africa 2021’, Egypt ranked the most attractive investment destination in Africa with Morocco, South Africa, Rwanda, and Botswana coming in second, third, fourth and fifth place respectively.
Nigeria’s fall from grace is detrimental to the country that is in dire need of investment inflows to grow the economy and create jobs.
The RMB Investment Attractiveness Rankings were based on the World Bank’s “Doing Business” ranking which was suspended in 2020 for reported data irregularities. However, the firm removed that metric and relied on other competitiveness indicators and the Economic Freedom Index provided by the Heritage Foundation to build our operating environment score.
The report noted that this year’s report took into account the extent of the pandemic’s impact by sketching the landscape of the continent pre-COVID-19, and then painting a picture of both its actual and potential outcomes through and post-pandemic.
Nigeria’s poor performance in the ranking occurred despite its status as a frontier market with growth potentials and market accessibility. According to the report, this came as a result of a myriad of challenges the country has been unable to fix.
“The government, which has been criticized for its slow pace of reform, still faces a myriad of security challenges that destabilise the country, such as the activity of the Islamist terrorist group Boko Haram in the northeast, forcing many people to flee.
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The government’s protectionist policies have hampered trade with neighbouring countries, a decision that could have long-term consequences for the giant African nation,” the authors noted.
The Boko Haram insurgency, which began in 2009 in Nigeria’s northern state of Borno, combined with counter-insurgency operations and communal clashes over scarce resources has led to the loss of many lives.
According to the Global Conflict Tracker, nearly 350,000 people have been killed in Northeast Nigeria since 2009.
Nigeria has also been named the third-most terrorised country in the world, according to the Global Terrorism Index. The security challenges have continued to put a dent in the perception of foreign investors regarding the safety of their investments.
The authors further explained that the threat of renewed attacks on oil infrastructure in the Gulf of Guinea, which led to a drop in black gold production in 2016 as well as theft and sabotage of facilities in the Niger Delta region, is still present.
The report also highlighted that the prevalence of poverty, mass unemployment and persistent double-digit inflation should continue to fuel a tense social climate.
According to the World Bank’s latest Nigeria Development Update report, inflation has pushed 8 million Nigerians into poverty between 2020 and 2021 as at November 2021. This is an increase from 7 million reported in June 2021.
At 15.99 percent in October 2021, Nigeria’s inflation rate is far from the Central Bank of Nigeria’s desired 6-9 percent range.
According to the National Bureau of Statistics (NBS), Nigeria’s unemployment rate at 33.3 percent is the highest on record. The high number of jobless Nigerians only heightened social risks.
According to the report, Egypt’s performance as a top investment destination came on the back of the recent pace at which the economy has grown, supported by structural reform programmes.
Furthermore, the reduction of its twin deficits in recent years has made it possible to replenish the country’s foreign exchange reserves, ensuring that Egypt is better equipped to cope with extreme global shocks, the authors noted.
According to a recent forecast by the International Monetary Fund (IMF), Egyptian economy will become the second-largest Arab and African economy during 2022, overtaking South Africa.
The IMF has also predicted an increase in total revenues as a percentage of gross domestic product (GDP) to reach 18.6 percent in 2021/2022, 18.7 percent in 2022/23, 18.9 percent in 2023/2024, and 19.1 percent in 2024/2025.
The IMF also expected a decline in Egypt’s total deficit as a percentage of GDP, to reach 7 percent in 2021/2022 and 6.2 percent in 2022/23.
However, Africa’s biggest economy is facing a trilemma of accumulating debt, rising spending needs, and difficulty in raising extra tax revenue.
Charles O’Tudor releases nuggets for branding
The just concluded season 05 of the Charles O’Tudor Brand Masterclass in Lagos was a huge success as industry thought leads were present to stimulate the minds of the audience, which was a mix of young entrepreneurs and business leaders in the corporate world.
Some of the thought leads present were Fela Durotoye, president, GEMSTONE Nation Builders Foundation; Lanre Olusola, chief catalyst at Olusola Lanre Coaching
Academy; Udo Okonjo, CEO, Fine and Country West Africa, and Olawale Ayilara, CEO/founder of Landwey.
The masterclass started off with a saxophone interlude by Bamise Odusote, who delivered sonorous tunes to set the mood for the event.
The first presentation on Audacious Branding was delivered by the main speaker and convener, Charles O’Tudor, highlighting the meaning and essence of being an audacious brand in your industry, which will help set the pace for global positioning.
The next presentation was by Fela Durotoye, who urged the audience to focus on brand beliefs and value add, saying what your brand believes in will set the pace for what your market will believe in.
Lanre Olusola spoke on the importance of wisdom, creating and preserving your name, recognising your gift, using it to serve humanity and solve problems at deep levels.
Udo Okonjo spoke on developing key strategies to expand market reach. According to her, audacious branding is an idea that helps you choose who and how to play within your industry, identifying and developing the right mindset it takes to win.
Furthermore, Olawale Ayilara stimulated the audience to think beyond their environment, stating that your brand can be present in a particular location but have a mindset that is not tied to or limited to that location. To achieve the status of an audacious brand, you have to define what you want your audience perception to be like.
The main highlight of the event was the presentation of an award plaque to Unyime King to honour the late Ubong King. The award was presented by Charles O’Tudor, the group principal consultant of ADSTRAT BMC, Olawale Ayilara, Lanre Olusola, and Martins Iluyomade, CEO/founder of Aimart International.
Another high point was the unveiling of the Charles O’Tudor Foundation and during the unveiling, Charles O’Tudor announced his move to step down from ADSTRAT BMC as the CEO and appointed a new CEO/Principal Consultant to run the brand – Daniel Victory Momoh, a strategist and conceptual thinker that has worked closely with the brand since May 2019.
The event ended with another saxophone interlude by Bamise Odusote and a vote of thanks from Charles O’Tudor.
Official sponsors for the event were Access Bank and Aimart International, a real estate and logistics company.