Photograph — Quartz

Nigeria moves up for the third year in a row on the ranking of the most attractive investment destination in Africa. The country moved another five places up as a result of the economy recovering from recession but the country is performing way below her potential as the biggest market on the continent.

Quantum Global’s independent research arm, Quantum Global Research Lab, in its 2018 Africa Investment Index (AII) report released yesterday shows that Nigeria’s current 14th position improved as a result of the recovery of the economy caused by the recent rise in oil prices. Morocco grabbed the first position with Egypt and Algeria occupying the second and third position respectively. South Africa is right behind at 4th.

Prof. Mthuli Ncube, Managing Director, Quantum Global Research Lab commenting on the report said that “in spite of the improvements to oil production and prices, African economies are turning their attention towards diversification to stimulate industrial development, and to attract investments in non-oil strategic sectors. Morocco has been consistent in attracting an inward flow of foreign capital, specifically in banking, tourism and energy sectors and through the development of the industry.”

The Nigerian government has directed efforts towards diversifying the economy and it has laid out a roadmap to enhance public infrastructure and support high growth sectors in the country such as manufacturing, ICT, and agriculture. The country had also placed an import ban on some agricultural products in order to facilitate local production.

The market size of the country has been a prominent factor to attract investments, especially imports. Nigeria, which is ranked number 1 based on Demographics factors in this latest report, has not invested in the people or leverage the population size to build an industrialised society.

As Prof. Mthuli Ncube noted while giving more insight on the report in an interview with Africa Business Magazine, “the issue with this is that a large population gives you the fighting chance to have the right size of the marketplace, a substantial market in the future. A new source of skills in the future. But you have to invest in those skills. You need to invest in education in health and also, kill the dependency ratio. So that’s really the message that needs to be strong enough in terms of advocating that investment. That’s actually the key; that’s how you harness dividend.”

He reechoes the statements made by Bill Gates at the special National Economic Council (NEC) held in Abuja last week. The billionaire philanthropist had also advised the economic team of the country to prioritize investment in human development.

“To anchor the economy over the long term, investments in infrastructure and competitiveness must go hand in hand with investment in people. People without roads, ports and factories can’t flourish. And roads, ports and factories without skilled workers to build and manage them can’t sustain an economy,” he explained. Nigeria’s potential to rise to the top of the most desired investment destination lies in the people. Massive investment in providing quality healthcare and education can see Nigeria rise to the top in a few years.

Prof. Mthuli Ncube, who’s formerly the chief economist at the African Development Bank, believes the  “continued FDI [Foreign Direct Investment] inflows will continue to drive the much-needed capital to develop Africa’s primary sectors to meet the demands of the continent’s rapidly growing middle-class, and into manufacturing sectors to create more jobs, enhance economic growth and support structural transformation.”

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