Nigeria is a study of contrasts this week: As global leaders touch down in the capital of Abuja for the high-profile World Economic Forum, the nation is reeling from the kidnappings of hundreds of young girls that have proven even more attention-grabbing.
But as horrifying as those still unresolved abductions may be, investors and outside analysts alike are split on what they mean for investments in Africa's most populous nation.
"Nigeria is a huge country. Parts of it—especially the northeast—are in an ongoing conflict, but it's important to have a very granular view on risk while keeping an eye on the big picture," said Tom Speechley, partner at The Abraaj Group, an investor in global growth markets.
Nigeria's newly revised annual gross domestic product now stands at $510 billion, making it a bigger economy than South Africa, whose GDP is $370 billion. Nigeria's annual GDP growth is 7.1 percent, according to the International Monetary Fund, outstripping other prominent economies of sub-Saharan Africa (see table).
Militant group Boko Haram, which wants to create a strict Islamic state in Nigeria, claims responsibility for the abduction of almost 300 schoolgirls from northeastern Nigeria three weeks ago. Another eight girls were kidnapped on Tuesday. The group—whose name translates to "Western education is sinful" in the Hausa language—wants to limit Western influence in Nigeria, which comprises large Muslim and Christian populations.
"If Boko Haram ever decided to expand beyond their traditional base in the north and strike commercial targets in Lagos or the Niger Delta, it would have a very chilling effect on investor sentiment, in my view," Dr. Helima Croft, senior geopolitical strategist with Barclays commodities research group, told CNBC.
"The rise in Boko Haram attacks comes at a time when the government is struggling to deal with a mounting oil theft problem and allegations of increasing government corruption," Croft said, referring to the resignation of Nigeria's central bank governor Lamido Sanusi over allegations of the embezzlement of $49.8 billion in oil revenue. "These problems could worsen as government heads into February 2015 elections."
Mark Shroeder, vice president of African Analysis at geopolitics monitoring firm Stratfor, agreed that Boko Haram could try to branch into other regions if national elections go against its ideological goals. But he said that as things stand, Boko Haram is unlikely to hurt Nigeria's larger economy.
"The attacks of Boko Haram have been on 'soft-targets,' disturbing the government more so than threatening economic development," Shroeder said, noting that militant groups are fairly commonplace in sub-Saharan groups because of security problems.
Nigeria is divided among more than 200 ethnic groups living in several states and has a relatively weak central government.
Schroeder said Nigerian security services have done well to contain the threat to the northeast corner of the country. Most, if not all, investment sectors are in the south of Nigeria.
To that end, Speechley of The Abraaj Group steers investments to other parts of the country.
"We focus on defensive sectors in specific cities, largely in the southwest corner of the country, and so far we see no reason to adjust our optimism on the investment opportunity there," Speechley said.
Ashley Bendell, head of distribution at investment banking group African Alliance, pointed to a large economy, dense population, high growth rates, and Africa's largest stock market as reasons investors should consider the country.
—By Mario Da Costa, CNBC