Nigeria's economic situation has faced further setbacks, with international rating agencies expressing growing concern. SBM Intelligence's 2024 Africa Country Instability Risk Index downgraded Nigerias status from stable in 2023 to vulnerable, indicating a worsening economic environment. The countrys economy has struggled since the administration's reforms began in May 2023, marked by high inflation, a depreciating naira losing over 70 of its value against the dollar, and rising energy costs due to the removal of fuel subsidies. These factors have exacerbated the cost of living, pushing more Nigerians into poverty.
Nigeria's score on the Risk Index dropped to 45 in 2024 from 39 the previous year, signaling greater political and economic instability. The index points to persistent issues like food inflation, widespread insecurity, and worsening poverty as primary drivers of instability. These challenges have caused a drop in business confidence and are expected to lead to financial market turmoil, delayed investment, and tighter credit, worsening the economic situation.
The report also highlights Nigeria's increasing polarization following the 2023 elections and the government's unpopular economic reforms, particularly the subsidy removal. Other African nations, such as Ethiopia, Cte d'Ivoire, and Benin, share similar risk statuses. On a broader scale, Sub-Saharan Africa's average risk score improved slightly, with Angola and Madagascar showing progress, while countries like Botswana and Zimbabwe faced significant losses.
The report identifies Central Africa as the most unstable region, while Southern Africa remains the most stable.
