Nigeria’s Investment Paradox: Falling Rankings, Rising Inflows
Nigeria ranks as the 9th best investment destination in Africa out of 31 countries, according to the Where to Invest in Africa Report 2024 by Rand Merchant Bank.
Although the ranking model was adjusted for 2024 due to the availability of new data sources, the report suggests that Nigeria slipped in the rankings despite its large economy and high GDP aggregate.
The report emphasises Nigeria’s strong economic performance and growth potential alongside notable progress in social and human development.
It also highlights important obstacles that might hinder long-term competitiveness and sustainable growth, especially in the areas of market accessibility, innovation, economic stability, and the general investment climate.
While Nigeria’s ranking has declined, the Foreign Direct Investment into the country has increased by 31% between 2023 and 2024.
Nigeria’s Investment Environment Metrics
Source: Rand Merchant Bank (RMB)
In 2023, Nigeria implemented a series of economic reforms that led to a sharp currency devaluation, causing the country to lose its position as Africa’s largest economy by aggregate GDP, slipping to third place.
According to the Where to Invest in Africa Report 2024, this economic downturn, coupled with limited economic diversification, an overreliance on petroleum and crude oil, persistent political instability, and a challenging business climate, has significantly weakened investor confidence.
These factors have made Nigeria a less attractive investment destination, raising concerns about its long-term economic resilience and growth prospects.
The report ranked Seychelles as Africa’s top investment destination, while the Republic of Congo ranked the worst.
Despite a decline in Nigeria’s investment attractiveness on the continental scale, Nigeria saw an increase in actual investment inflows compared to 2023.
Between Q1 and Q3 of 2024, the average Foreign Direct Investment (FDI) was $19.27 million, or 31% higher than in Q1 and Q2 of 2023. In 2024, average FDI reached $84.27 million, a notable rise from $65 million in 2023.
This growth suggests that, despite ongoing economic concerns, investor confidence in Nigeria remains resilient, signaling potential for recovery.
Nigeria's investment environment is paradoxical; although structural weaknesses, policy uncertainty, and economic difficulties have caused the country's continental ranking to drop, it nonetheless draws increasing amounts of foreign investment.
Nigeria's economic potential and resilience are shown by this paradox, notwithstanding investor scepticism and currency devaluation.
To fully leverage its strengths and restore investor confidence, Nigeria must address key barriers such as economic diversification, policy stability, and an improved business environment. The country can boost its competitiveness, draw in consistent investment, and promote long-term economic growth by putting smart changes into place and encouraging transparency.
Breaking the Shield: How Ending Immunity Could Boost Accountability in Nigeria
The House of Representatives has advanced a bill to review section 308 of the 1999 constitution, which provides immunity from civil and criminal proceedings, especially to the vice president, governors, and deputy governors while in office.
The bill seeks to abolish the constitutional immunity that shields them from prosecution while in office.
Section 308 of the 1999 constitution was originally intended to safeguard governmental stability by allowing key office holders to perform their duties without the distraction of legal proceedings, but it has increasingly become a major obstacle in the fight against corruption and abuse of power.
The immunity it provides has often shielded public officials from accountability, raising concerns about corruption, transparency and the rule of law.
Nigeria’s Corruption Challenge
Nigeria's performance on the Corruption Perception Index (CPI), a global indicator of public sector corruption, has not significantly improved over the last ten years.
This persistent low ranking highlights long-standing issues with governance, weak anti-corruption enforcement, and a persistent lack of accountability among public servants.
The CPI uses a scale from 0 to 100. 100 is very clean, and 0 is highly corrupt.
Nigeria has maintained its position as one of the most corrupt countries in the world by continuously ranging between 24 and 28 between 2015 and 2023.
While Nigeria's gradual improvement in corruption perception may seem like a positive development, the country still lags significantly behind on a global and continental level, going by the global and continental average.
Globally, Denmark holds the top position as the least corrupt country, with a CPI of 90 points, while South Sudan ranks as the most corrupt nation with a critically low score of 8 points.
Despite incremental gains, Nigeria remains far from meeting international transparency standards, highlighting the need for stronger anti-corruption efforts and systemic reforms.
The Rule of Law Challenge
Some theories suggest that immunity grants certain officeholders protection from prosecution while in office, creating a system where some individuals are held accountable while others evade legal consequences.
Over the past five years, concerns about impunity and weakened institutional checks and balances have grown, as the government has increasingly operated with reduced adherence to the rule of law.
This decline is reflected in Nigeria’s performance on the World Justice Project’s Rule of Law Index, which measures a country's commitment to the rule of law based on key parameters such as constraints on government powers, absence of corruption, open government, civil justice, and criminal justice. According to the index, Nigeria’s score dropped from 0.43 in 2020 to 0.40 in 2024.
A major factor in this decline is the lack of accountability, as officials often face little to no consequences for misconduct. This has led to weakened checks on government power, while transparency has stagnated and corruption has expanded.
According to the Independent Corrupt Practices and Other Related Offences Commission (ICPC), between 2020 and 2022, it received 4,108 corruption reports involving public officeholders. However, only 204 cases proceeded to court, resulting in just 60 convictions.
This means only 0.02% of reported cases led to actual consequences for misconduct, while 95% were never formally investigated or prosecuted.
These figures expose critical gaps in Nigeria's anti-corruption efforts, raising concerns about accountability, enforcement, and the overall effectiveness of the justice system in addressing corruption within public office.
If successfully enacted, this law could be a game-changer in governance by strengthening accountability, deterring corruption, and reinforcing the rule of law. By eliminating immunity, it would ensure that public officeholders are held to the same legal standards as ordinary citizens, fostering a culture of transparency and integrity in public service.
Thanks for reading this edition of Marina and Maitama. It was written by Lucy Okonkwo, and edited by Adijat Kareem.
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