Nigeria, Africa’s most populous and largest economy, ranks 19 out of 54 countries on the continent on investment destination, according to a report by Quantum Global Research Lab.
The report, based on a research that measured the Africa Investment Index (AII), is a guide to investors on countries that are most attractive for investment in the short and medium-term.
It rated Botswana, Morocco, Egypt, and South Africa best for investment inflows in Africa.
Botswana emerged as the best short-to-medium-term investment destination in Africa according to the report, which factored six areas of assessment – growth, risk, demographic, liquidity, business environment and social capital.
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The ranking indicated that Botswana made it to the top based on credit ratings, current account ratio, ease of doing business, and import cover.
However, Prof. Milton Delo, Managing Director, Quantum Global Research Lab, said Nigeria still stand a better chance for long-term investment based on its huge population and current production activities, often measures as gross domestic product.
He said Nigeria has no reason to worry about its external debt, and would bounce back as the rating showed that efforts to move it out of recession were yielding positive results, adding that the convergence in foreign exchange rates remained a remarkable effort that would reduce the risk factor in the market.
Delo dropped this hint at a media briefing in Lagos after the released of the report, which indicates that Nigeria requires extra effort to regain position as a leading investment destination in Africa.
“I expect Nigeria to improve. I see the oil price and the micro economy stabilizing. Nigeria is good for a long term investment,” Delo said,
He noted that investment in other sectors of the Nigerian economy would increase, particularly in the areas of social capital.
“Nigeria has huge manufacturing potential. It also has huge potentials in agro processing and massive potentials in infrastructure. The power sector will attract long investment and the real estate sector. Oil is not the complete determinant. Nigeria has a lot more to invest in,” he pointed out.
Delo stressed that it is critical for Nigeria to invest in infrastructure, leveraging public private partnership initiative to fast track the country’s growth.
Botswana, Morocco, Egypt and South Africa, Zambia, Cote d’Ivoire, Algeria, Tanzania, Namibia and Burkina Faso were rated top 10, while Somalia, Eritrea, Central African Republic, South Sudan, Sierra Leone, Liberia, Malawi, Equatorial Guinea, Gambia and Madagascar were rated worst.
In terms of improvement in the past three years, the report indicated that Nigeria and other countries such as Algeria, and Tunisia showed a worsening of their positions in the ranking, while Burkina Faso, Rwanda, Swaziland and Tanzania showed improvement.