The 10 most attractive investment destinations in Africa for 2020

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  • Rand Merchant Bank (RMB) has analysed 54 African economies according to their investment attractiveness, notable advancements in their operating environments.
  • Nigeria retains its eighth position on the top 10 in Africa due to improved macroeconomics on recovering oil prices and production.
  • South Africa, Ethiopia, and Tanzania economies tumbled in investment attractiveness in the last one year while Guinea, Mozambique, and Djibouti recorded the strongest gains.

A Johannesburg-based investment and advisory firm, Rand Merchant Bank (RMB), has released the top 10 investment attractiveness-ranked destinations in Africa for 2020.

In its 9th edition, “Where to Invest in Africa 2020," RMB says the latest report returns to its roots — delving deeper into the traditional and alternative sectors driving African economies to reach ever-higher levels of economic growth.

The report analyses 54 African economies according to their investment attractiveness, notable advancements in their operating environments.

After nine years of publishing, we never fail to be both pleased and surprised by the extent of improvement in countries that are not necessarily perceived as strong investment destinations.”says co-author and Head of RMB Global Markets Research, Nema Ramkhelawan-Bhana.

This year's report was co-authors Celeste Fauconnier, Neville Mandimika and Nema Ramkhelawan-Bhana.

According to the report, South Africa, Ethiopia, and Tanzania economies tumbled in investment attractiveness in the last one year while Guinea, Mozambique, and Djibouti recorded the strongest gains.

Nigeria, the largest economy in Africa in nominal terms, retains its top ten ranking on the eighth position in Africa due to improved macroeconomics on recovering oil prices and production.

Here are the top 10 investment destinations in Africa for 2020:

1. Egypt: The enormity of the market paired with a sophisticated business sector relative to other countries makes Egypt the most attractive investment destination in Africa. 

2. Morocco: While only Africa's fifth-largest market, Morocco’s expected growth rate of 4% over the medium term and its greatly-enhanced operating environment has served the country well since the Arab Spring. Its reintegration into the African Union and accession to the Economic Community of West African States (ECOWAS) have enhanced its investment appeal.

3. South Africa: South Africa has slipped another place in this year’s rankings, stymied by depressed levels of growth and a lack of structural reform. Yet it remains Africa's hotspot for portfolio investment. 

4. Kenya: The above 5% expected growth rates, helped by favourable weather and political reconciliation after 2017’s disputed elections, has propelled Kenya one spot higher than 2019. 

5. Rwanda: Rwanda has the second-best business environment in Africa. 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. 

6. Ghana: The growth outlook is strong, concentrated around the oil and gas sector. Non-oil growth will pick up again, supported by pro-business reforms and a steady improvement in the power supply. Political stability will remain underpinned by Ghana's strong democratic credentials. 

7. Côte d'Ivoire: Côte d'Ivoire is one of the more diversified economies in francophone Africa. Its strong growth rates are supported by the government's pro-business reforms and a relatively stable political context. Large infrastructure projects, particularly in transport and energy (financed by foreign investment, aid inflows, and the government) also support the country's strong position in our rankings.

8. Nigeria: Nigeria retains its top ten ranking due to improved macroeconomics, supported by recovering oil prices and production. A

9. Ethiopia: Ethiopia is the fastest-growing economy on the continent. With a population of almost 100 million people, the demand for goods and services is rising significantly. The prohibition of foreign ownership in key sectors is still a constraint for investment, but this is slowly changing. The government has announced shake-ups across industries, including plans to open up the once closely-guarded telecommunications and power monopolies.

10. Tunisia: Tunisia re-enters within the top ten supported by reasonable market size and favourable operating environment. The government's encouragement of foreign investment, through its new simplified investment code, has made the country increasingly attractive to multinational manufacturers.

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