By the end of August 2016, official data had confirmed that the second quarter of the year had seen a 2-percent contraction in Nigeria’s economy, from the same three-month period in 2015. Given that this was the second consecutive quarter of negative GDP (gross domestic product) growth, it meant that Africa’s biggest economy had slipped into a recession—a situation from which it is yet to escape.
Africa is known as a resource-rich continent. It is now also becoming rich in growing consumer markets. Multinationals, hotels and even luxury-goods retailers are setting up shop across the continent, seeing it as the last great emerging opportunity.
For investors with an appetite for high returns even if they are seasoned with high risk, investment in frontier markets, the smallest economies in the developing world, may be worth considering. The best approach is to allocate only a small portion of a portfolio to these potentially profitable but likely volatile markets.
Newly elected Nigerian President Muhammadu Buhari, who incorporated staunch anti-corruption promises in his election campaign, is faced with an evolving corruption scandal involving senior officials of the Central Bank of Nigeria as well as a number of Nigerian commercial bank managers.