Nigeria's explosive population rise and emerging middle class has catapulted it from so-called "new frontier" status to emerging market status, and is increasingly attracting investor interest.
AP
A frontier market is often perceived as riskier and more politically unstable than an emerging market and analysts believe Nigeria has what it takes to overtake South Africa as the continent's largest economy in the next three years.
According to United Nations statistics, by 2035 Nigeria will be the fourth most populous country globally and by 2055 it will have overtaken the U.S. to be third after India and China.
The country is a top pick for Larry Seruma, managing principal at Nile Capital Management.
"You are seeing good macro, you are seeing a strong naira, the economy is doing well, " he told CNBC, adding that the stock market has climbed around 30 percent this year and forecasts for gross domestic product were currently at 6.7 percent for 2012.
In Tokyo last week , the International Monetary Fund said sub-Saharan Africa was generally robust amid a hesitant global recovery. The organization's estimates for regional output remain above 5 percent for next year.
U.K. bank Standard Chartered is one firm that has already positioned itself in the country. In a research note it made the case for holding Nigerian government bonds.
"As the most liquid and deepest bond market in (sub-Saharan Africa) after South Africa, Nigeria has already seen substantial interest from the offshore community, " it said. "Nigeria's oil sector and improving fiscal terms, and far-reaching banking, power and agricultural reforms all add to Nigeria's attractiveness."
In September, Nigeria joined the JPMorgan Government Bond Index-Emerging Markets with the listing of its bonds, becoming only the second African country after South Africa to be included.
Cormac Leech, a U.K. bank analyst at Liberum, has been looking further into Standard Chartered's exposure in the country.
"Standard Chartered is currently achieving 30 percent return on tangible equity in Africa, double the group average, " he told CNBC.com. "[The bank is] likely to at least double its earnings in Africa over the next five years. However the real value upside for Standard Chartered's share price from Africa is on a 10 year plus view, given the potential for a positive long term super-cycle dynamic in Africa."
Seruma also had a positive outlook on Nigerian banks, highlighting Guaranty Trust Bank as a good investment opportunity.
"Nigerian banks continue to do well, they are relatively valued compared to other (emerging market) banks, " he told CNBC. "They have a high dividend yield anywhere between 8 to 9 percent in some cases so they are well managed, well capitalized, because the banking system has been cleaned up."
Renaissance Capital Group is another investment bank that has investigated growth in the country, explaining that there's a demand for haulage, food production, and quality housing companies.
One firm it singles out is United Africa Co. of Nigeria and the range of subsidiaries it owns.
"The changing lifestyles of Nigerian consumers, due to increased urbanization, and rising per-capita income, mean many can now afford to eat out, with fast-food chains like Mr. Biggs standing to benefit, " it said in a research note. "We also note increased demand for convenience foods that can be eaten on the go, and we believe UAC Foods (with products including Gala sausage rolls) stands to benefit."
—By CNBC.com's Matt Clinch
Disclosures: Nile Capital Management has company holdings in Guaranty Trust Bank.