Nigeria has slid to 14th place in Africa’s top ten investment destinations, with Egypt being the top country.
This is according to RMB’s ‘Where to Invest in Africa 2021’ study.
The ranking is based on the operating environments of countries, according to RMB, a division of FirstRand Bank Limited.
The pandemic, according to RMB Africa Economist Daniel Kavishe, ushered in a new world and a new approach to this year’s list.
“We created a new set of rankings that incorporated some of the unavoidable COVID-19-induced challenges, of which the operating environment score was one,” Kavishe said.
Fiscal scores, he claims, are crucial markers of how nations respond to COVID-19.
He stated: “The inclusion of a fiscal score in our rankings aimed to score governments’ fiscal positions and provided a basis from which investors can understand specific jurisdictions.
“Although the pandemic brought devastation, it also enabled opportunities for reimagining policies and trade relationships. Increasingly clear now is that home-grown strategies to tackle poverty, inequality and unemployment across Africa must be implemented. If not, all of Africa suffers.”
Capital will flow naturally to economies that offer a decent blend of opportunity and convenience of doing business, he claims.
Egypt, Morocco, South Africa, Rwanda, Botswana, Ghana, Mauritius, Côte d’Ivoire, Kenya, and Tanzania are among the top ten African nations to invest in, according to the firm.
Nigeria was placed 14th, outside the top ten, by the company. READ ALSO: Marketers Lament Inability To Access CBN’s N250BN Gas Intervention Fund
The company said: “The sheer size of Nigeria’s economy and large population base has undoubtedly aided the country’s economic environment and has led to an increase in investments in the economy over the past 10 years.
“The country boasts significant hydrocarbon resources and considerable agricultural and mining potential. With fiscal support expected to increase and continue over the next few years, given both the coronavirus shock and oil price collapse, the economy is expected to grow but at a slow and steady pace.
“One of the key tenets for its development will be the efforts that have been made to support small and medium enterprises through monetary policy reform. This should support the country’s efforts as it continues its expansion into sectors such as information technology.”
Nigeria’s excessive reliance on oil, however, is affecting the country’s economy, according to the business.
The company noted: “Nigeria’s heavy reliance on oil means that the drop in oil prices and production generated by the OPEC+ agreement is strongly impacting the economy. COVID-19 came at a time when the economy was still rebalancing from the drop in oil prices during the 2014 to 2016 period.
“Therefore, a lower drop in reserves, tight liquidity and a weak currency can still be expected. The government, which has been criticized for its slow pace of reform, still faces a myriad of security challenges that destabilize the country, such as the activity of the Islamist terrorist group Boko Haram in the northeast, forcing many people to flee.”
Nigeria was among the top ten countries in the world in 2018 and 2019. (Eighth in both years).
The corporation did add, however, that the country’s economy was hampered by a poor policy environment and inadequate infrastructure.
Nigeria was ranked 13 in 2017 and number six in 2016, according to the business.
Nigeria was ranked second in 2014, but slid to fifth in 2015.