Honduras, Venezuela and Tanzania are the only three countries – of 82 select countries – with a riskier business environment than Nigeria.
Of 82 countries considered by Bloomberg, based on unemployment, inflation, currency volatility, foreign reserves, and other metrics, Nigeria ranks 79.
The Bloomberg Country Risk Score is a composite of 29 indicators representing financial, economic and political risks facing investors.
Risk scores are calculated on a monthly basis, and they range from 0 to 100, with a higher score indicating less overall risk relative to other countries.
The countries with the best business environment are Norway, Switzerland, Sweden Hong Kong and Germany, with an index score of 96.5,95.8, 94, 93.7, and 92.3 respectively.
According to Bloomberg, foreign exchange stockpiles “shows total foreign reserves (excluding gold) held by each country’s central bank as a percentage of gross domestic product”.
“They effectively act as a cushion against economic shocks, such as hyperinflation and currency depreciation, that could be triggered by external or internal events.”
The countries with the best foreign exchange stockpiles were Hong Kong and Switzerland, with reserves in excess of $350 billion and $630 billion respectively.
At $520 billion, Norway has a bigger foreign reserves than Hong Kong, but it is ranked lower, due to a decline experience from over $535 billion in 2016.
Nigeria’s foreign reserves however stand a little above $27 billion, and it is one of the least reserve stockpile in the ranking.
South Africa came in at the 60th spot, with high currency volatility, high unemployment, high inflation, but with a foreign reserve in excess of $47 billion.
Understanding the challenges around Nigeria’s business environment, President Muhammadu Buhari had set up an ease-of-doing business presidential initiative, to make the country’s business environment better. The initiative is chaired by Vice President Yemi Osinbajo with the Minister of Industry, Trade and Investment, Okechukwu Enelamah as vice chairman.