For the first time in nine years, Nigeria has overtaken South Africa (SA) as the country with the most valued brand in Africa for 2019, a BusinessDay analysis from a report shows.
BusinessDay findings from the 2019 Nation Brands report surveyed and published by United Kingdom-based Brand Finance, the world’s leading branded business valuation and strategy consultancy, show that Nigeria brands recorded a total of $255.6 billion, making it number one, while SA’s had $218 billion in 2019.
Also, the country’s ranking moved up by eight places to 40th from 48th out of a total of 100 in 2018, making it among the world’s top 20 fastest growing nation brands, while SA moved up by just one position to 46th from 47th.
In these figures made exclusively known to BusinessDay, Nigeria’s brand valuation increased 25.6 percent to $255.6 billion against $203.5 billion in 2018.
Babatunde Odumeru, managing director, Brand Finance Nigeria, said, “Nigeria’s newly found elevation to Africa’s most valuable brand, knocking off Brand South Africa must be taken into prospective. The South African economy has been growing at almost a flat rate for a while.
“This dogged with political instability in the region and internationally reported incidents on the recent xenophobic attacks on other Africans in the country, all contributed to the decline in South Africa’s value, and ultimately took them off the top spot.”
Eight out of the 20 fastest growing nation brands came from Africa, namely Ghana, Uganda, Egypt, Libya, Ethiopia, Nigeria, Kenya and Morocco.
According to Odumeru, Nigeria’s brand value has been growing at a slow and steady rate but not at exponential rates compared to other African nations’ brands such as Ghana, Egypt and Uganda, and the steadiness in the country’s growth rate indicates that our growth fundamentals are working somewhat.
“I believe that the resultant effects of certain reforms notably the ongoing effort to diversify the economy is slowly kicking in, especially as it relates to the nation’s brand perception.
“Furthermore, with relatively new sectors emerging as a result, such as the culture industries, which are exporting and exposing our culture internationally on a larger scale through our artists, perceptions of our culture are slowly changing in a positive light. And, the current activities in the tech space are slowly playing a pivotal role in giving the nation brand a resonance globally,” Odumeru further said.
In a global marketplace, a nation brand is one of the most important assets of any state, encouraging inward investment, adding value to exports and attracting tourists.
Since 2015, the Federal Government has been intensifying efforts in diversifying the economy from oil to non-oil sector. Also, the financial services and information technology sector in Nigeria has experienced a meteoric rise in the eight years to 2018, leading to an inflow of at least $204 million into it, according to a recent report by Asoko Insight.
Brand Finance measures the strength and value of the nation brands of 100 leading countries using a method based on the royalty relief mechanism. The report, which analysed nation brands from October 2018 – October 2019, is employed to value the world’s largest corporate brands.
From the report, the royalty relief mechanisms are based on the notion that brands are strategic assets to the companies that own them. That is, if you own a brand then you can exploit them through licensing agreements.
“If you licence your brand out, what is paid to you is known as a royalty. This means you earn a percentage rate of the income the borrower of yours earns from using your brand name,” the report stated.
A further analysis showed that Nigeria has been trailing behind SA and Egypt as the 3rd most valuable nation brand in the continent for a long while until 2013 when Nigeria surpassed Egypt into second place.
Over the years, the country’s brand value has been growing consistently, but it declined in 2016, then pick up after in 2017, then continued. It recorded $67billion, $94billion, $111billion, $132billion, $189 billion, $ 178billlion, $192 billion, $203 billion and $255 billion in 2014, 2015, 2016, 2017, 2018 and 2019, respectively.
For SA, it recorded $157 billion, $222 billion, $270 billion, $256billion, $225billion, $196billion, $222billion, $191billion and $228 billion in 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018 and 2019, respectively.
“I think the fact that Nigeria is ranked among the countries with fastest growth of brand is largely connected to its favourable demographic in terms of huge market size, fast-rising population growth and expanding middle-class group. The progress is positive for the economy and it gives more room for companies and multinationals to come in and leverage these bright spots,” Adewale Dare, a Lagos-based economist said.
Ayorinde Akinloye, analyst at CSL Stockbrokers in his own opinion said that interest rate in Nigeria was lower in 2019 than last year and that, could have led to the artificial increase in brand value.
For the past decade, the report has provided key benchmarks for diplomats, tourism boards, trade agencies, nation brand consultants and managers. It also analyses the benefits that a strong nation brand can confer, but also the economic damage that can be wrought by global events and poor nation brand management.
This year’s study showed how the nation brands of developing economies grow at much faster rates than those of developed ones.
Odumeru expects that the country’s brand value will continue to grow, especially at exponential rates if the government develops a national brand agenda.
“This must focus not just on the development of local and indigenous brands, but also developing local entrepreneur’s ability to develop strong and global brands. The key issue here is to attract foreign customers in a bid to increase export revenues,” Odumeru suggested.
BUNMI BAILEY
