Country risk in Nigeria is high. The OECD country credit grade is 6, akin to a speculative grade sovereign rating. This indicates an elevated risk of Nigeria being unable and/or unwilling to meet its external debt obligations.
Nigeria is ranked 114th out of 190 countries on the World Bank’s ease of doing business gauge. Nigeria has improved dealing with construction permits and starting a business in recent years. Although Nigeria lags the regional average on most measures, it is significantly easier to get credit, protect minority investors and enforce contracts in Nigeria.
The World Bank ranks Nigeria in the bottom quartile for all but one dimension of governance. Nigeria also falls behind the sub-Saharan average on all areas of governance. Nigeria is particularly prone to political instability and violence, scoring in the worst 5 countries for terrorism in the last five years, according to the Institute for Economics and Peace.
The risk of expropriation in Nigeria is high, despite having laws that protect against expropriation. A US-owned waste management company was expropriated in 2008.
Political risk is also high. The prevalence of many extremist groups, including Fulani Herdsmen, Boko Harem and Islamic State undermines security in Nigeria.