Nigeria’s investability scorecard dropped further to 0.163 as it remains the ninth most viable destination for investment in Africa, according to Rand Merchant Bank.
This is because investors coming to the continent find Seychelles and Mauritius’ markets most attractive.
The two Indian Ocean island nations outperform the continent when measured by a combination of their economic performance, market accessibility, investment climate and social and human development, the Johannesburg-based lender said in a report published on Tuesday.
“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 said.
According to the RMB’s ranking, which assessed 31 nations in Africa, Nigeria fell from 0.15 last year to 0.163 in the investability scorecard in 2024 beneath peers like Egypt and South Africa who were ranked third and fourth with 0.49 and 0.33 scores respectively.
Egypt is largely attractive to investors as it scores well in economic complexity, innovation, human development and income equality while South Africa was highly rated based on forex stability and improved liquidity, the report stated.
Africa’s biggest economy ranked second in economic performance and potential but came 29th in market accessibility and innovation.
Nigeria boasts $375 billion a year in gross domestic product, according to the report’s data. It is also the continent’s largest population with over 220 million people.
This is countered, however, by a middling score for GDP per capita at just 15th in the RMB Where to Invest in Africa model.
Despite the government’s continued efforts to ensure a diversified economy, Nigeria is still hooked to its age-long dependence on petrodollar revenue, making it score low in the Johannesburg-based lender economic complexity index.
“Nigeria’s reliance on oil exports is reflected in its 29th position on the model for economic complexity. Petroleum and crude oils make up nearly 70% of its trade flows,” it said.
The report stated that Nigeria’s political stability repeats the nation’s complexity ranking of 29th on the model, noting that the vast cultural groupings of the country; its nuanced system of presidency coupled with an insurgency problem, makes it a politically fraught place for investors.
“All this makes for a challenging business environment where great benefits are available to those who succeed,” RMB said.
It however noted that Nigeria is becoming an easier place for investors to succeed, stressing that the nation rose from 169 out of 190 countries on the Ease of Doing Business index to 131 in the 2020 edition.
At the bottom of the ranking is the mineral-rich Southern African nation, Zimbabwe which has been, for years, struck with a battered currency crisis and rampant inflation.
The country with over 16 million people and a nominal GDP of about $32 million now has a new Zimbabwean Gold currency which is expected to ensure price stability and lure in investors.
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