It has been a relatively smooth ride for Africa in the six months since we launched the 2017/2018 edition of Where to Invest in Africa.
RMB is here to help you navigate the landscape and provide you with insights to guide you on your African journey.
Our Top 10 most attractive African countries in which to invest is quite different to previous years. In a nutshell, regional stalwarts have struggled to adapt to the prolonged slowdown in commodity prices and sluggish levels of production growth.
Noticeable omissions to the Top 10 this year are Nigeria and Algeria, which have fallen to #13 and #15 respectively. While, on the other hand, Ethiopia and Rwanda have climbed three and four places to #4 and #8.
|2017 rank||2016 rank||Country||2017 score||2016 score||What has improved?||What has deteriorated?|
|31||38||Sierra Leone||3.91||3.54||Economic activity|
|43||46||São Tomé and Príncipe||3.13||3.09|
|52||53||Equatorial Guinea||2.44||2.21||Economic activity|
|53||52||South Sudan||1.72||2.32||Economic activity|
Uganda is steadily closing in on the Top 10 – although the margin between #10 and #11 is still healthy. Public sector investment, the execution of flagship projects, services sector growth and advancements in the upstream oil industry are expected to further Uganda’s medium-term economic development plans.
For the first time in 15 years, Nigeria does not feature in the Top 10, recessionary conditions have eroded its short-term investment appeal. Despite the many challenges it faces, the West African giant is still regarded as a viable long-term investment option.
Algeria, at #15, finds itself in its lowest position in our index records. The country is in a precarious position as its government struggles to generate meaningful growth in the non-oil industry space.
Burkina Faso has pierced the Top 20 due to an accelerated pace of economic activity. It also boasts abundant agricultural land and natural resources that include manganese, marble, limestone, pumice and salt — not to mention that it is also Africa’s fourth-largest gold producer.
Botswana, Mauritius, and Namibia are Top 20 stalwarts. This has much to do with the ease of doing business in their respective markets. A commonly asked – and valid – question is why are these nations not in our Top 10. After all, they are rated investment grade, higher than South Africa, and have narrowed the transport infrastructure gap between themselves and that of more advanced economies.
The rationalisation for their exclusion is due to their relatively small markets as market size is a key constituent of our methodology. Combined, the GDPs of the three countries is only 12% of South Africa’s and less than a tenth of Nigeria’s.
By extending our investment-attractiveness methodology to include 191 jurisdictions, we can measure Africa’s performance relative to other countries. The unfortunate reality is that African economies are still at the lower end of the global-performance spectrum, which continues to be dominated by the US, UK, Australia, and Germany. More than half the continent is ranked only between 120 and 191.
Egypt and South Africa, our two most attractive investment destination in Africa, rank 45 and 46, surpassing the likes of Portugal, Hungry and Sri Lanka but remain just out of the top 40.