The difficult patch that Nigeria, the largest economy in Africa, is going through does not seem to be abating.
According to a new Nielsen report (pdf) which provides a ranking of business prospects for leading markets in Sub Saharan Africa, Nigeria is no longer the top investor destination on the continent. In its place, Cote d’Ivoire has risen to the top of the rankings.
Buoyed by a fast growing economy and a lengthy period of political stability highlighted by successful elections last year, Cote d’Ivoire is now regarded as a prime destination for investment in Africa. Although, that status could now be affected following a recent attack by Al Qaeda in the Islamic Mahgreb (AQIM).
Having been ranked as the top investor destination at the start of 2015, Nigeria has now fallen to fourth on the rankings. The ominous slide fits the narrative of Nigeria’s slowing economic growth amid a global slump in commodity prices. Oil in particular, Nigeria’s main export and revenue source, has been badly hit.
According to the research firm, Nigeria’s slide was “driven primarily by deteriorating macro-economic indicators”. It also adds that “consumer indicators and overall confidence levels” have also dipped. A recent Capital Importation report (pdf) by the Nigeria Bureau of Statistics confirms this. Last year, Nigeria’s recorded total inflow of capital into the economy stood at $9.6 billion —a 53% drop from the previous year and the lowest recorded total since 2011.
While incidental economic factors have largely contributed to Nigeria’s floundering economy, the country’s government has also come in for criticism for not managing the crisis effectively. President Buhari’s handling of the economy has been questioned with the Central Bank of Nigeria instituting strict monetary controls in response to commodity prices and a currency slide. These controls, which inevitably strained citizens and hardly had the desired effect, have been described as unorthodox.
As Buhari closes in on his first year in office, many Nigerians will be hoping that in his second year, the focus will be on triggering an economic rebound in Africa’s biggest economy following slowed growth.