Despite Covid-19 pandemic economic shocks, Nigeria has retained its position as Africa’s most valuable nation brand for the third consecutive time, according to the latest 2021 Nation Brands report.
The report, done by Brand Finance, a brand valuation consulting firm stated that the country’s brand value increased year-on-year by nine percent to $236 billion in 2021 from $217 billion.
This increase also helped to move the country’s ranking up by two spots to 38 positions out of 100 nations, reaching its highest position ever.
“Africa’s largest economy suffered its deepest recession in four decades during the pandemic but has begun its return to growth thanks to the recovery of oil prices as well as the government’s timely fiscal policies to protect the economy,” the report further stated.
In the last three months of 2020 (Q4), Nigeria exited recession when its economy grew by 0.11 percent after recording two negative growths in Q2 and Q3, data from the National Bureau of Statistics shows. Since its exit in Q4, it has grown by 5.0 percent in Q2 2021 following 0.5 percent growth in the previous quarter.
“While these results are mainly driven by GDP considerations, we need to start developing a framework that would enable us to get to a place where intangible assets such as innovation and strong brands are what is impacting our GDP,” he further added.
In a global marketplace, a national brand is one of the most important assets of any state, encouraging inward investment, adding value to exports, and attracting tourists. The latest report comes at a time when businesses are still reeling from the impact of the pandemic.
Brand Finance measures the strength and value of the nation brands of 100 leading countries using a method based on the royalty relief mechanism. The report analyzed different nation’s brands from September 2020 –September 2021.
In measuring brand value, the net economic benefit a brand owner achieves by licensing it in the open market, the firm adopted the royalty relief method.
This method involves a combination of the market and income valuation approaches. The value of the intangible asset is based on the costs that the company would avoid by not having to pay a license fee or royalty to use the asset. This is compliant with the industry standards set in ISO 10668.
Aside from Nigeria, the rest of the top nations brand in Africa are Egypt ($180 billion), South Africa ($175 billion), Algeria ($75 billion), Kenya ($67 billion), Morocco ($66 billion), Ghana ($50 billion), Ethiopia ($47 billion), Angola ($ 38 billion) and Tanzania ($33 billion).
Uchenna Uzo, consumer expert and the faculty director at the Lagos Business School said, although the ranking is good news but it is too early to make a big celebration out of it. “We have to be on our toes to further sustain our ranking.”
He also adds that the ranking gives an opportunity for brands to go outside of Nigeria to sell since their brands are better valued now than other African countries.
“And perhaps with this African Continental Free Trade Area agreement going on, they will be more daring in their trying to sell to other customers.”
Globally, countries like the UK, US, Japan, and France are still amongst the top most valuable nations but they have all fallen out of the top 10 strongest nation brands ranking due to the perception of how they handled Covid-19.
“It will be important for the world’s largest economies to focus on making up the ground they have lost in brand strength, in order to protect their brand value.
These countries have all scored poorly domestically for their handling of Covid and they need to rebuild this trust with their respective populations,” David Haigh, the chairman and chief executive officer at Brand Finance advised.