Nigeria has become less stable in the past year and can now be categorised as ‘vulnerable’ based on an instability risk index, according to a new report.

SBM Intelligence, a pan-African think tank, ranked Nigeria as a ‘vulnerable’ country and one of the “biggest losers” in sub-Saharan Africa on its instability risk index. This was disclosed in its recent Africa Country Instability Risk Index (ACIRI) which assesses the political, economic and social factors frustrating stability in African countries.

The report spotlighted 48 West, Central, East and Southern African countries. These countries, according to the report, “were grouped by region as delineated by the African Development Bank.”

However, the think tank explained that North Africa was “exempted because of the sub-Saharan focus of this study.”

Although Mauritania and Western Sahara are mapped to West Africa, they were exempted from the study due to what the SBM Intelligence described as “a paucity of data, geopolitical considerations and a cultural and economic affinity with North Africa.”

The report sheds light on three key factors — history, economy, and geopolitics, as well as leadership and governance — and how they contribute to political instability in these countries.

It also 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.

Countries are therefore categorised into six levels of stability — Red Watch, Critical, Warning, Vulnerable, Stable, and Safe.

The firm explained that a higher score indicates a higher level of political risk to business. According to it, a country that scores 70 and above is categorised under Red Watch.

Countries that scored between 60 and 69 are categorised as critical while those that score between 50 and 59 are placed under warning. Countries like Nigeria that scored between 40 and 45 are marked as vulnerable. Those that scored between 30 and 39 are marked stable while those that scored below 30 are marked safe.

“A lower score shows how stable a country is, while a higher one tells the opposite,” the firm noted.

‘Biggest losers, biggest gainers’

Countries like Botswana, Seychelles, Namibia and Zimbabwe joined Nigeria to earn the title of biggest losers.

Analysis by SBM Intelligence showed that Nigeria’s instability worsened as it ranked 45th this year, unlike the previous year when it ranked 39th and was marked “stable.”

This deterioration could be blamed on unfavourable government policies that weakened the country’s currency and eventually forced some big investors out of Nigeria.

It would be recalled that some multinational companies, including Kimberley-Clark, Procter & Gamble (P&G), GlaxoSmithKline Consumer (GSK) Nigeria, Equinor, Sanofi and Bolt Food, recently withdrew from the Nigerian market.

The exit was attributed to various challenges, such as foreign exchange shortages, rising energy costs, and declining consumer purchasing power amid high inflation.

“Botswana experienced a GDP decline of nearly 2% in the first quarter of 2024, and Zimbabwe experienced economic challenges such as debt and currency crises,” SBM Intelligence says, adding: “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.”

Meanwhile, five countries were crowned the “biggest gainers.” They include Angola, Burundi, Chad, Togo, and Madagascar.

“A cutback on governance costs drove Angola’s performance, while Madagascar’s GDP growth improved to 4.4 per cent in 2023 from 4.3 per cent in 2022,” the think-tank noted.

Regional perspective

The report indicates that Central African countries had the most representation in the top ten, with four countries present: Angola, Central African Republic, Chad, and Gabon.

West Africa followed closely in the top ten with three countries: Guinea, Sierra Leone, and Togo.

“The regions with the lowest representations are East Africa, with 20% represented by Burundi and Madagascar, and Southern Africa, at 10%, with Eswatini as its sole representative. The worst-performing entities are shared by Eastern and Southern Africa, at 40% each–represented by countries such as Seychelles, Kenya, Mauritius, and Comoros on the East side and Botswana, Namibia, Zimbabwe, and Zambia on the South,” the report noted.

However, Southern Africa retained its spot as the most stable region for the second year with a score change of -1.3, the report disclosed, noting that “Central Africa was the least stable, ending the year with a score change of 6.78, performing worse than East (1.07) and West (2.47). This performance can be explained by an improvement in South Africa’s economy, which grew by 0.4% in the second quarter of 2024 from 0.1% in the first quarter.”

While the raging conflict between the Rwanda-backed M-23 militia and Congo “contributed to the relatively poor performance in Central and East Africa”, attempted coups and Islamist insurgencies “contributed to West Africa’s poor outing.”

PT