Improved investors’ confidence has boosted Nigeria’s risk-reward score according to the 2018 Africa Risk-Reward Index from Control Risks and Oxford Economics.
The latest report shows that in Africa, Nigeria comes fourth after Zimbabwe, Egypt and Ghana for demonstrating the most positive changes for business.
The improvement in reward score, and reduction in risk scores will attract more investors to these countries, the report said.
“Nigeria in 2017 recovered to 0.8%real GDP growth, after a painful recession triggered by a dip in oil prices,” the report read.
“Protectionist policies and uncertainty over President Muhammadu Buhari’s health also discouraged foreign investors.
“Economic activity in 2018 will be overshadowed by politicking ahead of the 2019 presidential election. However, Nigeria’s economy will weather the political uncertainty.”
Commenting on Nigeria’s business environment, Tom Griffin, Senior Partner for West Africa at Control Risks, said: “In 2017 many West African governments have embarked on an impressive journey to implement the right reforms for economic growth and improvement of investors’ confidence.
“In Nigeria, the recently initiated Economic Recovery and Growth Plan has begun to tackle some of the economy’s challenges, including corruption and an infrastructure deficit. The plan has also sought to remove bottlenecks to improve the ease of doing business, which in turn boosts investors’ confidence.”
The risk-reward index provides current and prospective investors with a fusion of risks and opportunities across the continent.
While the reward scores are based on medium term economic growth forecasts, economic size, economic structure and demographics, the risk scores are computed from economic and political risks facing businesses.