Experienced Investor
Nigeria tops table of frontier markets to watch
Nigeria is the most attractive frontier market for UK investors, according to a new report.
The research by investment platform Emerging Crowd identified the five frontier markets with the greatest potential for British investors, with Africa’s largest economy coming out on top.
Nigeria has a population of 174 million and its GDP is forecast to rise by 5.5% in 2015.
African countries dominated the rankings, with the continent’s other star performers Kenya and Ghana taking the second and third spots. The Philippines and Vietnam complete the top five.
Will Tindall, co-founder of Emerging Crowd and author of the report, said: “Nigeria is in a unique sweet spot for investors right now. This month’s smooth transition of power from one democratically elected president to another is a potent endorsement of its political stability, and the falling oil price has spurred its vast economy to diversify rapidly.
“Thousands of entrepreneurial young companies are springing up – and with such a huge and untapped market on their doorstep, the best have extraordinary growth potential. With the Nigerian currency now 14% cheaper against the Pound than it was a year ago, the country’s stocks represent exceptional value to investors who are keen to broaden their horizons into frontier markets.”
The second-placed country on the list is Kenya, which has seen a string of successful technology companies emerge from Africa’s first tech incubator, in an area of Nairobi that has inevitably been dubbed “silicon savannah”. Kenya’s GDP is forecast to grow by 6.4% in 2015 – more than double the rate of the UK economy.
A recent survey by Deloitte found Kenya to be the most popular market for private equity investment in Africa, underlining the nation’s maturity as an investment destination. The survey cited Kenya’s growth prospects, its open market policies, and its well-developed financial sector as key factors in its appeal.
Tindall added: “All of the countries to make the top five have a thriving SME sector like the UK’s, together with strong GDP growth and favourable demographics. Crucially, they all have a strong legal framework for investor protection.”
