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Nigeria’s economy on “warning” status, SBM index reveals

October 23, 2023

Nigeria’s economy on “warning” status, SBM index reveals

SBM Intelligence, a leading research and risk consultancy firm in Nigeria, has stated that Nigeria’s economy is on ‘warning’ status as it ranked 60% in the “Economy” macro risk indicator.

The research firm revealed this in its Africa Country Instability Risk Index (ACIRI) which assesses the political stability risks in 47 African countries.

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One of the report’s key features is the innovative framework for assessing the risk of coups d’état. Given that 2023 has been the year when the bite of longstanding state fragility has come to the fore – whether in African government takeovers or the renewal of hostilities in the Middle East, the ACIRI is a timely tool that indicates a country’s vulnerability to political instability.

The ACIRI’s framework uses indices such as ethnic tensions, a country’s history of coups, dominant ethnic groups, economic concentration, ageing leaders, and the nature of their economies (mono-product, bi-product or multi-product), to develop a stability ranking for each country which is further divided into the ‘Red Watch, Warning, Critical, Vulnerable, Stable and Safe’ categories.

“The macro risk indicators are grouped into four categories: Leadership and Governance (with a weighting of 40%), Economy (30%), Geopolitics (15%) and History (15%), with each indicator subdivided into several measures for an overall score of 100%. A higher score delineates a higher level of political risk to business.

Particularly, Nigeria ranked 60% in the “Economy” macro risk indicator category, indicative of the country’s economic challenges. Sub-indicators in the “Economy” category include GDP growth, product/sector dominance, regulatory maturity, food security, poverty rate, debt sustainability, and currency volatility.”

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