Business environment risk: Five upgrades and one downgrade

In the framework of its regular review of the business environment risk, Credendo has upgraded five countries and downgraded one country.

Business environment risk

• Nigeria: upgrade from G/G to F/G

Nigeria has been upgraded to the second highest business environment risk classification (F/G), reflecting cautious progress in a still challenging economic environment. As oil revenues are gradually recovering, economic growth is projected to reach 3% over the coming years. The current account is expected to be in a limited deficit around 2% of GDP and with rising capital inflows, this should keep the external balance of payments in a surplus at least until 2026. The consequential stabilisation of the naira is the major driver of the improved business environment risk classification. Inflation on the other hand is expected to remain high, although it should drop below 20% as of next year, for the first time since 2021. In addition to Nigeria’s difficult business environment, great insecurity risks, high socio-political tensions, inter-communal violence and challenges to oil production, this explains the sustained high-risk profile.