Egypt is the best country to invest in Africa according to RMB’s 2020 Where to Invest in Africa report, the big size of the market and a sophisticated business sector relative to other countries made it the most attractive investment destination in Africa.
The improvement in Egypt’s business environment, facilitated through government programmes, and a steady increase in investment from the private sector had enhanced growth and assisted in repositioning Egypt on the global investment map.
Taking second place was Morocco. While only Africa’s fifth-largest market, GDP growth was expected to be more than 4 percent over the medium term, and an enhanced operating environment had served the country well since the Arab Spring.
Reintegration into the African Union and accession to the Economic Community of West African States also lifted its investment appeal.
South Africa has fallen to third place in RMB’s “2020 Where to Invest in Africa” report, due to its constrained economic growth, but it remains Africa’s bastion of a well-developed financial and capital market.
The report said the JSE remained Africa’s most liquid stock exchange with an excess of $1.4 billion (R20.68bn) traded daily. This is much higher than the Cairo Stock Exchange in Egypt, which trades $44 million a day.
It said South Africa also ranked highly on other financial market depth measures such as private credit as a percentage of gross domestic product (GDP), demonstrating that consumers have access to a wider range of financial instruments relative to other African countries.
South Africa’s ease of doing business ranking, however, has slipped in the last few years, but it remains one of the Top 10 easiest operating environments in Africa, the report showed.
Kenya was placed fourth. Above 5 percent expected growth rates, helped by favourable weather and political reconciliation after 2017’s disputed elections, had propelled Kenya one spot higher than 2019.
The economy benefits from diversity and a sustained expansion in consumer demand, urbanisation, East African Community integration, structural reforms and investment in infrastructure, including an oil pipeline, railways, ports and power generation.
Rwanda was in fifth place. According to the World Bank’s operating environment scoring, the country has more than doubled the efficiency of its business environment in less than a decade.
The government has invested heavily into its domestic industries and foreign direct investment has increased, pushing Rwanda to one of the five fastest-growing economies on the continent.
Nigeria on the other hand, with an eighth ranking, had retained its top 10 position due to improved macroeconomics, supported by recovering oil prices and production. With the largest population on the continent, domestic demand continues to rise.
Here are the best countries to invest in Africa 2020:
1. Egypt
Market size (US$bn PPP): 1,391.7
Market growth %pa: 5.9
Operating environment (1 = poor | 10 = good) : 4.5
2. Morocco
Market size (US$bn PPP): 330.4
Market growth %pa: 4.1
Operating environment (1 = poor | 10 = good) : 5.8
3. South Africa
Market size (US$bn PPP): 813.1
Market growth (%pa) : 1.7
Operating environment (1 = poor | 10 = good): 5.5
4. Kenya
Market size (US$bn PPP): 191
Market growth %pa: 6.0
Operating environment (1 = poor | 10 = good) : 5.1
5. Rwanda
Market size (US$bn PPP): 30.1
Market growth %pa: 7.1
Operating environment (1 = poor | 10 = good) : 6.6
6. Ghana
Market size (US$bn PPP): 211.1
Market growth %pa: 5.4
Operating environment (1 = poor | 10 = good) : 4.8
7. Cote’d Ivoire
Market size (US$bn PPP): 117
Market growth %pa: 6.9
Operating environment (1 = poor | 10 = good): 4.9
8. Nigeria
Market size (US$bn PPP): 1,214.8
Market growth %pa: 2.5
Operating environment (1 = poor | 10 = good): 3.9
9. Ethiopia
Market size (US$bn PPP): 240.7
Market growth (%pa): 7.2
Operating environment (1 = poor | 10 = good) : 3.7
10. Tunisia
Market size (US$bn PPP): 150.8
Market growth (%pa): 3.6
Operating environment (1 = poor | 10 = good) : 5.3
11. Mauritius
Market size (US$bn PPP): 31.7
Market growth (%pa): 4.0
Operating environment (1 = poor | 10 = good) : 6.9
12. Senegal
Market size (US$bn PPP): 1,391.7
Market growth (%pa): 5.9
Operating environment (1 = poor | 10 = good) : 4.5
13. Botswana
Market size (US$bn PPP): 44.4
Market growth (%pa): 4.3
Operating environment (1 = poor | 10 = good) : 6.0
14. Uganda
Market size (US$bn PPP): 104.9
Market growth (%pa): 6.3
Operating environment (1 = poor | 10 = good) : 4.1
15. Tanzania
Market size (US$bn PPP): 186.1
Market growth (%PA) : 4.5
Operating environment (1 = poor | 10 = good) : 4.2
Methodology
RMB’s “2020 Where to Invest in Africa” uses the same four sources as in previous years: the World Bank’s Doing Business Report, the Heritage Foundation’s Index of Economic Freedom, the World Economic Forum’s (WEF) Global Competitiveness Report and Transparency International’s Corruption Perceptions Index, which are surveyed at different times of the year. RMD used these four as they are highly regarded, have long histories, and contain a mix of hard and subjective data, but acknowledge that there are many other indices that could be used.
