Nigeria and South Africa: Will Elections Bring Change for Investors?

Africa’s two largest economies will hold elections this year, and there’s a good chance the outcomes will lead to slightly faster growth and higher asset prices. But rising populism and nationalism remain a longer-term risk.

Together, Nigeria and South Africa account for roughly 40% of Africa’s gross domestic product (GDP). While their political dynamics differ, the two countries are both struggling with negative per capita growth and high unemployment (Display).

Both economies need radical change, but that’s easier said than done. So far, neither government has developed a strategy for solving these problems, meaning job-creating economic growth will be in focus when voters go to the polls.

The good news is that the risks often associated with African elections—last-minute spending sprees, ruling parties’ historical reluctance to relinquish power—have faded. Although recent instability in Gabon and Democratic Republic of Congo were reminders of African political risks, we’ve seen a number of peaceful and market-friendly transitions across the continent.