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- Nigeria has dropped six points from ‘stable’ to ‘vulnerable’ in latest risk index
- The decline is driven by economic challenges caused by unfavourable government policies
- Central African countries had the most representation in the top 10 status with four countries
Nigeria has dropped six points from “stable” in 2023 to “vulnerable” in 2024, according to the latest SBM Intelligence Africa Country Instability Risk Index (ACIRI).
The report, which assesses the political, economic and social factors frustrating stability in African countries, noted that the economic challenges and shocks in Nigeria, driven by government policies, are responsible for the decline.
In the latest ranking, Nigeria scored 45, which is a downgrade from 39 in 2023. A higher score in the risk index, according to SBM Intelligence, means a higher level of political risk to business.
The index evaluates the stability of the 48 African countries by considering indices like ethnic tensions, coup history, dominant ethnic groups, food security, poverty rate, debt sustainability, conflict and vulnerability and economic diversity.
It categorises African countries into six levels of stability, which are red watch, critical, warning, vulnerable, stable and safe.
In the ‘vulnerable’ category are Nigeria, Ethiopia, Comoros, Côte d’Ivoire, Benin and Togo.
Factors driving Nigeria’s instability
The report noted that the fragile state of Nigeria’s economic landscape is worsened by factors such as rising food inflation, insecurity and rising poverty levels, occasioned by unfavourable government policies.
It stated, “Nigeria’s economy continues to worsen, with rising food inflation, persistent insecurity across all geopolitical zones and many people falling into extreme poverty.
“It is more polarised now than ever after the 2023 election and the unpopular reforms of the new government, such as the removal of petrol subsidies, which has worsened living conditions and led to the closure of businesses.”
The inflation rate in Nigeria has continued to surge, rising from 22.4 per cent in June 2023, to a new 28-year all-time high of 34.19 per cent in June. It tapered to 33.40 per cent in July after 19 months of increase and further declined for the second consecutive month in August to 32.15 per cent before increasing to 32.70 per cent in September 2024 and 33.88 per cent in October.
Analysis of performance
The report noted that of 48 countries, 31 experienced improved performance, while the rest deteriorated.
The report classified Angola, Burundi, Chad, Togo and Madagascar as the “biggest gainers,” while the “bigger losers” category includes Botswana, Seychelles, Namibia, Zimbabwe and Nigeria, due to a decline in the countries’ rating.
It said, “Botswana experienced a GDP decline of nearly two per cent in the first quarter of 2024, and Zimbabwe experienced economic challenges such as debt and currency crises.
“Nigeria, Africa’s fourth largest economy, ended the year with a score change of -6, following the exit of foreign businesses over weaker currency, rising inflation and other economic challenges.”
According to the report, Sub-Sahara Africa recorded an average of 45.4 per cent in 2024, an improvement from 47.7 per cent in 2023.
Analysis of regional performance
Going by region, the report noted that Central African countries had the most representation in the top 10 with four countries: Angola, Central African Republic, Chad and Gabon. It is closely followed by West Africa at 30 per cent with Guinea, Sierra Leone and Togo.
The regions with the lowest representation are East Africa with 20 per cent, represented by Burundi and Madagascar, while Southern Africa had a 10 per cent representation with Eswatini.
The report noted, “The worst-performing entities are shared by Eastern and Southern Africa, at 40 per cent each – represented by countries such as Seychelles, Kenya, Mauritius and Comoros on the East side and Botswana, Namibia, Zimbabwe and Zambia on the South.”
“APC Impact?” Nigeria’s economy drops to 4th in Africa, loses $315.8bn in 10 years
Meanwhile, TheRadar reported that Nigeria’s economy lost $315.8 billion in the 10 years between 2014 and 2024 and fell from being the first largest economy in Africa to the fourth, according to data from StatiSense, a leading data company using AI to simplify data and documents.
According to the data, between 2023 and April 2024, Nigeria lost an estimated $122.2 billion, moving from the third to the fourth largest economy in Africa.
