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Nigeria tops the rest of the continent in latest Nation Brands ranking but records brand value loss of $217 billion

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THUR, 12 NOV, 2020-theGBJournal- Fourteen African nations feature in the Brand Finance Nation Brands 2020 ranking, with Nigeria the highest ranked in 40th position.

As with the majority of nations across the ranking, Nigeria has recorded a brand value loss, down 15% to US$217 billion.

The outlook for the nation at the beginning of the year was looking particularly positive with the economy expanding exponentially, reaching a point where it overtook South Africa to become the continent’s largest economy. However, as with other nations globally this growth has been rapidly stunted and is contracting from the near halt of economic activity – including much lower oil export volumes and the steep oil price drop – as a result of Coronavirus. 

2020 has marked yet another troubled year for the South African economy as it continues to contract at an alarming rate and the far reaching and debilitating COVID-19 pandemic has exacerbated this deterioration further. This damage is reflected in its 26% brand value loss to US$162 billion.

In contrast, Ethiopia has emerged as the shining star of the continent, its nation brand value growing an impressive 19% to US$61 billion.

Jeremy Sampson, Managing Director, Brand Finance Africa, commented: “Despite many African nations being praised for their responses to the global pandemic – which has led to far fewer cases and deaths than many other nations – this has not protected African economies from the widespread and severe damage that has ensued. There is a long journey of recovery ahead, but with the recent announcement of a working vaccine, many nations will hope to be on this path sooner rather than later.”

Top 100 nation brands lose US$13.1 trillion of brand value

The top 100 most valuable nation brands in the world have suffered a monumental loss to their brand value because of the COVID-19 pandemic, amounting to US$13.1 trillion, according to the latest report by the world’s leading brand valuation consultancy Brand Finance.

2020 has put the nations of the world to the test – from the economic impacts of COVID-19 on nations’ GDP forecasts, inflation rates, and general economic uncertainty, to diminished long term prospects. The Brand Finance Nation Brands 2020 report estimates that the total brand value of the top 100 nation brands dropped from US$98.0 trillion in 2019 to US$84.9 trillion in 2020, with almost every nation feeling a significant impact of the health crisis on their respective economies.

David Haigh, CEO of Brand Finance, commented:

“The downward trend of nearly all the world’s most valuable nation brands is unsurprising given the year we are currently experiencing. With COVID-19 contributing to the recent rise of protectionism, we may see a reversal of the economic growth brought about by globalisation. Having said that, optimism has certainly prevailed, with forecasts looking less dire than initially predicted, and with the announcement of a working vaccine beginning to be rolled out, the future is certainly looking brighter.” 

US & China remain in a league of their own

The US and China remain a cut above the rest, claiming first and second position in this year’s ranking, recording brand values of US$23.7 trillion and US$18.8 trillion respectively. Relations between the two forerunners remain particularly fragile because of the US-China trade war that has consumed both economies over the past few years.

Long-standing leader the US, has recorded a 14% brand value loss to US$23.7 trillion, following yet another turbulent year. Now home to both the most cases and deaths of the virus globally, the world’s largest and strongest economy continues to encounter harsh criticism and questioning on the global stage. With Biden announced as the winner of the 2020 presidential election, in one of the most controversial and polarising races in American history, the country is likely to chart a new course and change many of the policies pursued under the incumbent president.

Despite this political uncertainty, American brands’ sheer dominance and success globally will always provide the nation’s economy and reputation with a strong safety net. American brands – Amazon, Google, Apple, and Microsoft – claimed four out of the top five spots in the year’s Brand Finance Global 500.

Unlike the US, China’s brand value has managed to remain largely stable, recording only a modest 4% drop this year. The Chinese government’s quick response to the COVID-19 outbreak, paired with its targeted stimulus measures in recent months, have resulted in the nation becoming the first major economy to recover from the pandemic and is currently expected to be the only G20 economy that will grow this year.

David Haigh, CEO of Brand Finance, commented:

“We are once again witnessing China inch ever closer behind the US in our ranking of the world’s most valuable nation brands. This year has proven that there is nowhere to hide when it comes to a nation’s economic performance and China has shown its ability to recover at a meteoric pace – providing a beacon of hope that recovery can happen on the global stage too.”

Top 10 down 14% on average

With the pandemic wreaking havoc on nation brand values across the world, the top 10 has recorded a brand value loss of 14% on average. Japan has fared relatively better than its counterparts, recording a modest 6% brand value loss to US$4.3 trillion, and inching up to claim third spot in the ranking. Defying the odds of many that expected the nation to be one of the worst hit at the beginning of the COVID-19 outbreak – due to its proximity to China, its densely populated cities, and burgeoning elderly population – Japan has emerged as relatively successful compared to its counterparts, with lower Coronavirus cases and deaths and with its economy faring better.

Luck of the Irish strikes again

Ireland has bucked the negative trend this year as the only nation brand in the top 20 to record a positive brand value growth, up 11% to US$670 billion. This strong performance is largely attributable to its forecasts being impacted less dramatically than others on the global stage – a particularly positive position given the twin threat of Brexit and COVID-19. The Irish economy has proven to be particularly resilient, being supported by strong exports and continued consumer spending. Should the UK reach a deal on Brexit, Ireland will find itself in an even stronger position as trade disruption with the UK will be reduced.

David Haigh, CEO of Brand Finance, commented:

“The luck of the Irish is at work yet again, as the nation mitigates the risks and limits the impact of both COVID-19 and Brexit. Backed by a vibrant and resilient economy, Ireland’s strong nation brand reinforces the Emerald Isle’s perception as a preferred investment destination even in times of crisis.”

The UK retains 5th position

The UK has retained 5th position, following a 14% brand value decrease to US$3.3 trillion. Despite Brexit being forced into the shadow of COVID-19 this year, the uncertainty surrounding the outcome has persisted. The UK government are still engaged in negotiations with the EU, with fishing rights and competition rules as two sticking points for both sides.

David Haigh, CEO of Brand Finance, commented:

“As the UK enters the final weeks of Brexit negotiations before the transition period deadline at the end of the year, the nation is certainly at a turning point. There is a great opportunity for Britain to become an economy that operates similar to its neighbour, Ireland – with lower taxes and a friendly ecosystem for startups. Should the UK reach a suitable trade deal, Brand Britain could certainly thrive and become the entrepreneurial hub off the coast of Europe as Singapore is in Asia.”

Vietnam defies global trend, up 29%

Vietnam is the fastest-growing nation brand in this year’s ranking, its brand value skyrocketing 29% to US$319 billion. Vietnam, which has recorded staggeringly low COVID-19 cases and deaths, has emerged as one of the top locations within the Southeast Asian region for manufacturing, and has become an increasingly attractive destination for investors – particularly from the US – that are looking to relocate their China operations following the fallout from the US-China trade war. Recent trade deals with the EU are supporting the growth of the nation further. 

Do cry for me Argentina

In stark contrast, Argentina has recorded the biggest drop in brand value this year, down 57% to US$175 billion. With COVID-19 cases recently passing the one million mark – the smallest nation by population to do so – Argentina has been struggling to respond effectively to the outbreak. Riots have erupted across the nation with protestors calling for a reform of the justice system, corruption cases to be investigated, and to demonstrate general grievances of the handling of the pandemic. The nation’s already ailing economy is taking further hits and the road to recovery will not be short.

Germany is world’s strongest nation

In addition to measuring nation brand value, Brand Finance also determines the relative strength of nation brands through a balanced scorecard of metrics evaluating brand investment, brand equity, and brand performance. For the first time this year, the nation brand strength methodology includes the results of the Global Soft Power Index – the world’s most comprehensive research study on nation brand perceptions, surveying opinions of over 55,000 people based in more than 100 countries. According to these criteria, Germany is the world’s strongest nation brand with a brand strength score of 84.9 out of 100 and a corresponding AAA rating.

Long renowned for its strong and stable economy and for being particularly well governed, Germany scores well across the majority of our data points. Angela Merkel’s long tenure as Chancellor has provided a stable presence against the backdrop of unstable and erratic counterparts. For the most part, the German government’s and Merkel’s response to the pandemic has been received positively both domestically and internationally and the numbers support this with the country recording consistently lower cases per million than any of its Western European counterparts.

David Haigh, CEO of Brand Finance, commented:

“Germany remains a beacon of stability both across the continent and globally. As Merkel prepares to step down as Chancellor in 2021 – a position she has held since 2005 – Germany will be hoping that its history of reliable leadership during times of increasing polarisation across Europe will stand it in good stead in the coming year as the nation works towards a post-COVID recovery.”

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