Rand Merchant Bank’s Where to Invest in Africa 2021 report has placed Egypt as Africa’s top investment destination, with Morocco following and South Africa in third place while Rwanda and Botswana were ranked in fourth and fifth respectively.
Ghana outperforms other West African countries to rank sixth in investment-attractiveness on the continent while Nigeria, a country often referred to as the Giant of Africa owing to its large population and economy was ranked 14th.
The top 20 investment destinations in Africa according to RMB:
Egypt is a developing country, ranking 8th on the African Human Development Index the country is the top investment destination in africa. Politically, Egypt is considered to be a regional power in North Africa, the Middle East and the Muslim world, and a middle power worldwide. Egypt has a diversified economy, which is the second-largest in Africa.
Egypt’s economy depends mainly on agriculture, media, petroleum imports, natural gas, and tourism.
While Egypt’s economy was hard hit by the pandemic, it was also one of the first to bounce back to a path of growth. This, owing to the swift measures it introduced and the fact that it been on a stronger footing at the outbreak of COVID-19.
In its annual report, the RMB’s Where to Invest in Africa has rated Egypt as one of the top countries in Africa to invest.
The economy of Morocco is considered a relatively liberal economy, governed by the law of supply and demand.
The major resources of the Moroccan economy are agriculture, phosphate minerals, and tourism.
The services sector accounts for just over half of the GDP. The industry sector– consisting of mining, construction and manufacturing – is an additional quarter. The sectors that recorded the highest growth are the tourism, telecoms, and textile sectors. Morocco, however, still depends to an inordinate degree on agriculture, which accounts for around 14% of GDP but employs 40–45% of the Moroccan population.
The economy of Morocco continues to benefit from political stability. A special fund to combat COVID-19 was established in 2020, representing 2.7% of GDP. Two-thirds of the funds were to be provided by private sources and one third by the government.
The country is the second most attractive investment destination in africa.
South Africa is a developing country, ranking high on the Human Development Index. It has been classified by the World Bank as a newly industrialised country, with the second-largest economy in Africa, the 35th-largest in the world and the third best country to invest in africa. However, crime, poverty and inequality remain widespread, with about a quarter of the population unemployed and living on less than US$2 a day. The region is also ranked in the top ten countries in the world for income inequality.
South Africa offers a strong manufacturing and retail base that will continue to support southern African regional economies with goods and services.
Rwanda is a country of few natural resources, and the economy is based mostly on subsistence agriculture by local farmers. An estimated 90% of the working population farms, and agriculture constituted an estimated 32.5% of GDP in 2014. Farming techniques are basic, with small plots of land and steep slopes. Despite Rwanda’s fertile ecosystem, food production often does not keep pace with population growth, and food imports are required, But in recent years, with the growth of agriculture, the situation has improved.
Rwanda’s service sector include banking and finance, wholesale and retail trade, hotels and restaurants, transport, storage, communication, insurance, real estate, business services and public administration including education and health
Rwanda which is ranked the fifth best country to invest in Africa continues to benefit from the efforts it has made to improve its operating environment. Furthermore, as part of the National Strategy for Transformation (NST), various investments should support the construction and energy sectors over the next few years.
Since independence, Botswana has had one of the fastest growth rates in per capita income in the world. Botswana has transformed itself from one of the poorest countries in the world to an upper middle-income country. GDP per capita (PPP) grew from $15,015 in 2016 to $18,113 in 2016. Although Botswana is resource-abundant, a good institutional framework allowed the country to reinvest resource-income in order to generate stable future income. By one estimate, it has the fourth highest gross national income at purchasing power parity in Africa, giving it a standard of living around that of Mexico.
While generally open to foreign participation in its economy, Botswana reserves some sectors for citizens. Increased foreign investment plays a significant role in the privatisation of state-owned enterprises. Investment regulations are transparent, and bureaucratic procedures are streamlined and open, although somewhat slow. Investment returns such as profits and dividends, debt service, capital gains, returns on intellectual property, royalties, franchise’s fees, and service fees can be repatriated without limits.
The country has high foreign-exchange reserves, which have enabled it to weather the pandemic-induced economic storm better than most. The Pula Fund, a sovereign fund created in 1994 that finances a large part of the budget deficit, has meant that fiscal dependency on debt has been low.
Ghana is a multinational state, home to a variety of ethnic, linguistic and religious groups; while the Akan are the largest ethnic group, they constitute only a plurality.
The West African country is an average natural resource enriched country possessing industrial minerals, hydrocarbons and precious metals. It is an emerging designated digital economy with mixed economy hybridisation and an emerging market. It has an economic plan target known as the “Ghana Vision 2020”. This plan envisions Ghana as the first African country to become a developed country between 2020 and 2029 and a newly industrialised country between 2030 and 2039.
Ghana is classified as a middle income country. Services account for 50% of GDP, followed by manufacturing (24.1%), extractive industries (5%), and taxes (20.9%).
The Ghana economy is an emerging digital-based mixed economy hybrid with an increasing primary manufacturing and export of digital technology goods.
Structurally, Ghana’s economy has seen major shifts over the past few years, positioning it for significant growth going forward. This is supported not only by primary-sector industries like oil and gold but accelerated development in the tertiary sector.
Ghana is the best best to invest in West Africa and the sixth best place to invest in Africa.
Since independence from Britain in 1968, Mauritius has developed from a low-income, agriculture-based economy to a high-income diversified economy, based on tourism, textiles, sugar, and financial services.
Mauritius is highly ranked for democracy and for economic and political freedom. Mauritius is the only African country to be in the “very high” category on the Human Development Index. Mauritius is also ranked as the most competitive, and one of the best country to invest in the African region.
The country is a welfare state; meaning the government provides free universal healthcare, free education up through the tertiary level and free public transportation for students, senior citizens, and the disabled. In 2019, Mauritius was ranked the most peaceful African country by the Global Peace Index.
Mauritius has a high-income economy, according to the World Bank in 2020. The World Bank’s 2020 Ease of Doing Business Index ranks Mauritius 13th worldwide out of 190 economies in terms of ease of doing business. According to the Mauritian Ministry of Foreign Affairs, the country’s challenges are heavy reliance on a few industry sectors, high brain drain, scarcity of skilled labour, ageing population and inefficient public companies and para-statal bodies.
Aided by an extremely favourable tax regime, it has been forecasted that Mauritius financial sector will remain one of the main drivers of the country’s economy into the future.
Through the production of coffee and cocoa, Côte d’Ivoire was able to become an economic powerhouse in West Africa during the 1960s and 1970s, though it went through an economic crisis in the 1980s, contributing to a period of political and social turmoil. It was not until around 2014 that the gross domestic product again reached the level of its peak in the 1970s.
In 2020, Ivory Coast was the world’s largest exporter of cocoa beans and had high levels of income for its region. In the 21st century, the Ivorian economy has been largely market-based, and it still relies heavily on agriculture, with smallholder cash-crop production being predominant.
According to RMB’s Where to Invest in Africa report, a rise in private investment should continue to fuel construction, agri-industry and services (trade, transport and ICT in particular). Private investment will benefit from the impetus provided by public investment under the 2016-20 National Development Plan.
Kenya’s economy is the largest in eastern and central Africa, with Nairobi serving as a major regional commercial hub. Agriculture is the largest sector: tea and coffee are traditional cash crops, while fresh flowers are a fast-growing export. The service industry is also a major economic driver, particularly tourism.
Kenya has a Human Development Index (HDI) of 0.601 (medium), and is ranked 58 out of 190 countries in the World Bank ease of doing business ranking. The important agricultural sector is one of the least developed and largely inefficient, employing 75% of the workforce compared to less than 3% in the food secure developed countries. Kenya is usually classified as a frontier market or occasionally an emerging market, but it is not one of the least developed countries.
The Kenyan government’s efforts to ensure that implementation of the “Big Four” plan focused on industrialisation, universal health coverage, food security and affordable housing will invariably lead to fast economic growth.
Tanzania has been on a rapid path of development over the past few years. This growth can be attributed to consistent public investment from the government in key secondary and tertiary sectors, ranging from the energy sector to advancements in the telecommunications and finance sectors.
In 2020, the World Bank declared the rise of the Tanzanian economy from low income to lower middle income country, as its GNI per capita increased from US$1,020 in 2018 to US$1,080 in 2019.
As of 2021, according to the IMF, Tanzania’s gross domestic product (GDP) was an estimated $71 billion (nominal), or $218.5 billion on a purchasing power parity (PPP) basis. GDP per capita (PPP) was $3,574.
Industry and construction is a major and growing component of the Tanzanian economy. This component includes mining and quarrying, manufacturing, electricity and natural gas, water supply, and construction.
Algeria is a regional power in North Africa, and a middle power in global affairs. It has the highest Human Development Index of all non-island African countries and one of the largest economies on the continent, based largely on energy exports.
The hydrocarbon sector has been the bedrock of Algeria’s economic advancement over the past two decades. While growth in the short term (2-3 years) is expected to slow down, the economy has managed to ensure broad-based development, lifting the bulk of its population from poverty, improving literacy rates and making significant advancements in both the health and education sectors. The economy is now in transition given the need to structurally shift from the oil sector while targeting other (non-social) economic sectors.
Public investment and consumption are expected to remain important drivers of activity, particularly in construction as Ethiopia continues its efforts to liberalise. Projects that are expected to extend the road and rail networks, establish special economic zones and build hydroelectric dams, including the Renaissance dam on the Nile, will be given priority over the next few years.
The economy of Senegal is driven by mining, construction, fishing and agriculture, which are the main sources of employment in rural areas. Senegal’s economy gains most of its foreign exchange from fish, phosphates, groundnuts, tourism, and services.
The country also has one of the best developed tourist industries in Africa.
Like virtually every other country on this list, the main obstacles to the economic development of Senegal is its great corruption with inefficient justice, very slow administrative formalities, and a failing education sector. But that aside, Political stability and a generally improving business environment should continue to help the economy.
Senegal is the 13th best country to invest in the African region according to RMB’s where to invest report.
Nigeria‘s economy is the largest in Africa, so it comes as no surprise that the country is considered one of the best place to invest in Africa. Nigeria is often referred to as the Giant of Africa owing to its large population and economy and is considered to be an emerging market by the World Bank
The sheer size of Nigeria‘s economy and large population base has undoubtedly aided the country’s economic environment and has led to an increase in investments in the economy over the past ten years.
The country boasts significant hydrocarbon resources and considerable agricultural and mining potential. With fiscal support expected to increase and continue over the next few years given both the coronavirus shock and oil price collapse, the economy is expected to grow but at a slow and steady pace.
Over the past decade, supported by an IMF programme, Seychelles’ economic prospects have changed significantly. Efforts by the government have ensured that the economy etched out growth of more than 4.0% over the past decade.
Prior to the pandemic, the government had set aside plans for increased investments into the energy sector.
The economy has been fortunate to receive sizeable foreign direct investment, which is likely to lead to increased investments in water and sanitation as well. Big areas of investment include the fishing sector, which will aid the economy in the next few years.