Despite the rise in incidents of religion-driven violence in Africa’s largest economy, Nigeria remains one the continent’s most attractive investment destinations, offering providers of capital access to an increasingly consumerist population of 170-million and the opportunity to benefit from the country’s abounding oil reserves.

According to Institute for Security Studies executive director Dr Jakkie Cilliers, Nigeria is an “interesting” State characterised by its position as a top African investment destination and as one hindered by insecurity emerging from the rise of militant Islamist movement Boko Haram.

“Nigeria’s investment appeal appears to be divorced from the threats posed by Boko Haram and other developmental challenges. [Nigeria’s capital] Lagos seems to be irresistible to investment flows [as a result of its] market size,” he said during a keynote address at a Frontier Advisory Africa Risk and Investment Forum on Wednesday.

Describing Nigeria as an “incredibly” corrupt State with “incredible” potential, Cilliers added that the country offered the ambitious investor a high-risk high-return proposition, despite being a dysfunctional country in many ways.

“Somehow, Nigeria always manages to pull it off. If you want to go somewhere in Africa, this is the place to go,” he asserted.

The country’s indelible level of investment attractiveness was reiterated in a recent opinion piece by Frontier Advisory senior analyst Simon Schaefer and director Hannah Edinger, who argued that its rise was inevitable, with the only surprise being how long it took for the country to do so.

This followed a rebasing of Nigeria’s economy earlier this year, which showed that it had surpassed South Africa as the continent’s largest economy, boasting a gross domestic product (GDP) of $510-billion.

But the report warned that “no number-crunching exercise” could conceal the fact that Nigeria’s economy still had a long way to go to reach the structural, institutional and business sophistication of South Africa.

“Major challenges, such as inefficient infrastructure, corruption and socio-ethnic tensions beg to be overcome for Nigeria to reach its full potential and create wealth for its people.

“As such, while leading as the economic powerhouse of the region, no rational investor or fund manager will invest in the country simply because it has doubled its GDP without weighing up other elements,” the duo argued.

The report further noted that security challenges would continue to scupper the real growth potential of the country.

“As a visible proposed recipe to fight terror, [the] actions of the Nigerian government in tackling the situation are perhaps less clear, except for [comments by] President Goodluck Jonathan, who has described this [period] as ‘the beginning of the end of terrorism,’” the report read.

It added that, to create a viable and vibrant economy and to tackle socioeconomic issues such as poverty, unemployment and inequality, government needed to focus on the quality of growth and not necessarily the speed and quantity thereof.

Notwithstanding Nigeria’s increasing investor popularity, Schaefer and Edinger asserted that South Africa remained the continent’s largest recipient of portfolio flows and ranked as the largest holder of inward foreign direct investment stock in Africa.

“As a result, in broader terms, South Africa being dethroned [in terms of GDP] does not mean much, yet,” they maintained.