Nigeria’s Economic Woes Push Country from Stability to Vulnerability
Nigeria has been downgraded to a “vulnerable” status in the latest SBM Intelligence Africa Country Instability Risk Index for 2024, a significant shift from its “stable” rating in 2023. The country now faces heightened political and economic risks, scoring 45—down six points from last year’s 39.
The index, which measures the risk of political instability affecting business operations, has raised concerns for Nigeria as its economic challenges deepen. Factors such as soaring food inflation, persistent insecurity, and an increasing poverty rate are identified as key drivers of the nation’s instability. The report from SBM Intelligence highlights how these issues have worsened under government policies, including the unpopular removal of petrol subsidies, which have exacerbated living conditions and led to the closure of businesses across the country.
“The economic situation in Nigeria continues to deteriorate with rising food inflation, widespread insecurity, and a growing number of people plunging into extreme poverty,” SBM Intelligence stated in the report. “The country has become more polarised, particularly after the contentious 2023 election and the government’s controversial reforms.”
Nigeria’s downgrade places it alongside several other African nations facing similar economic and governance challenges, including Ethiopia, Comoros, Côte d’Ivoire, Benin, and Togo.
The instability index reveals broader trends across the African continent. In 2024, Sub-Saharan Africa (SSA) as a whole showed some improvement, with the regional average score dropping from 47.7% in 2023 to 45.4%. Of the 48 countries assessed, 31 saw improved stability, while others, including Nigeria, experienced setbacks.
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Among the biggest gainers were Angola, Burundi, Chad, Togo, and Madagascar, largely driven by improvements in governance and economic performance. Angola’s reduction in governance costs and Madagascar’s GDP growth of 4.4% in 2023 are cited as examples of positive trends.
However, Nigeria, Botswana, Namibia, and Zimbabwe were among the biggest losers, grappling with issues such as economic contraction and currency crises. Botswana, for example, faced a nearly 2% GDP decline in the first quarter of 2024.
The instability index also shows varying levels of stability across regions. Central Africa was the least stable, with countries like Angola, Chad, and Gabon contributing to a regional score drop of 6.78%. In contrast, Southern Africa emerged as the most stable region for the second consecutive year, thanks to economic improvements in South Africa, which saw a 0.4% growth in the second quarter of 2024.
West Africa, including countries like Guinea and Sierra Leone, also performed poorly, while East Africa had limited representation, with Burundi and Madagascar noted for their challenges.
