Nigeria rises to eighth in Bloomberg’s Africa investment ranking

Nigeria’s rise to eighth in Bloomberg’s African investment ranking is evidence that parts of the economy have genuinely improved. But a better risk score is not the same thing as becoming a country where investors are increasingly willing to build factories, create jobs and leave capital for the long term.

Nigeria moved from 12th to eighth among 19 African economies in Bloomberg Economics’ 2026 Investment Risk-O-Meter, the biggest improvement in the latest assessment.

The country improved in economic strength, fiscal strength and external vulnerability, while institutions and governance, and infrastructure, are the other two areas considered by the ranking. ( ThinkBusiness Africa )

That makes the improvement worth taking seriously.

It also tells us where the improvement stops.

There is evidence that the reforms changed something

Nigeria’s economic position today is not identical to where it was three years ago.

The World Bank says macroeconomic stability has improved, with stronger reserves and government revenues, greater exchange-rate flexibility and lower inflation than at its earlier peak. Economic growth reached 4.2% in the first half of 2026. ( World Bank )

Foreign investors have also returned in much larger numbers.

Capital entering Nigeria reached $16.41 billion between January and May 2026, more than double the amount recorded over the same period in 2025. ( Vanguard News )

So the Bloomberg ranking is not appearing from nowhere.

There are measurable improvements underneath it.

But look at what kind of money is coming in

This is where the picture becomes more complicated.

Of the $16.41 billion that entered Nigeria in the first five months of 2026, about $15.61 billion — more than 95% — was portfolio investment.

Foreign direct investment, the type more closely associated with investors buying businesses, building facilities and committing capital for longer periods, actually fell from about $210 million to $190 million. ( Vanguard News )

That difference matters.

Portfolio investors can buy Nigerian stocks and government securities because yields are attractive and the currency environment has become easier to navigate.

But that is a different decision from spending hundreds of millions of dollars on a factory that may operate in Nigeria for 20 years.

Businesses are still describing a difficult economy

There is another reality sitting beside the Bloomberg ranking.

Nigerian manufacturers spent an estimated ₦1.35 trillion on alternative electricity in 2025, according to the Manufacturers Association of Nigeria.

Another industry report released this week estimated that imports now account for about 64% of Nigeria’s manufactured-goods market, partly because domestic producers struggle to compete on cost. ( The Guardian Nigeria )

The World Bank similarly says electricity, transport, logistics, insecurity and other infrastructure problems continue to constrain productivity and private-sector growth. ( World Bank )

So both things can be true:

Nigeria can become less risky to investors while remaining expensive and difficult for businesses already operating inside Nigeria.

This is my argument

Nigeria’s rise in the Bloomberg ranking is real progress, but the country should treat eighth place as evidence that stabilisation is working — not as proof that the investment problem has been solved.

The reforms since 2023 have attacked some problems investors cared deeply about: an unpredictable foreign-exchange system, weak external buffers and large fiscal distortions.

That makes Nigeria easier to price.

And being able to price risk matters enormously to investors.

But the next stage is harder.

A country becomes truly attractive for long-term investment when an investor can reasonably predict electricity costs, move goods through ports efficiently, enforce contracts, obtain permits without excessive uncertainty, protect assets and sell to consumers whose purchasing power is growing.

Bloomberg’s own framework effectively captures this distinction: Nigeria improved in the macroeconomic categories, while the country’s longstanding infrastructure and institutional problems remain important constraints. ( ThinkBusiness Africa )

Why Nigerians may not feel particularly impressed

There is also a difference between what makes an economy attractive to an international investor and what makes the economy feel better to someone living inside it.

The World Bank says Nigeria has made meaningful progress towards macroeconomic stability, but household incomes have not fully recovered and poverty remains high. ( World Bank )

So when Nigerians hear that the country is suddenly more investable while food, transport, electricity and other costs remain difficult, scepticism is understandable.

The ranking is measuring risk and opportunity for capital.

Citizens are measuring income, jobs and living standards.

Those two measurements can eventually meet, but they have not fully met yet.

The number I would watch next

The most important evidence may therefore not be whether Nigeria rises from eighth to sixth next year.

It may be whether foreign direct investment starts rising alongside portfolio investment.

If investors begin committing substantially more long-term capital to factories, infrastructure, technology, agriculture and businesses — and those investments begin producing jobs — then the Bloomberg ranking will have predicted something deeper.

If portfolio money keeps rising while direct investment remains weak, Nigeria may have succeeded in becoming a more attractive place to hold Nigerian assets without becoming an equally attractive place to build Nigerian businesses.

That is the distinction that will show whether eighth place marks the beginning of an investment transformation, or simply reflects macroeconomic numbers that have become easier for investors to live with.