The South African Rand Merchant Bank (RMB) recently unveiled its list of the top 10 investment destinations in Africa for investors interested in real assets, expanding their businesses that rely on physical infrastructure or looking to invest in the economy.
Traditionally, investment destinations in Africa have been ranked based on economic activity and business operating environment. However, RMB’s approach adds an extra layer of sophistication by considering crucial factors such as operating environments, fiscal scores, and development plans, which are vital for investment attractiveness in a COVID-19 impacted world.
Egypt emerged as one of the first African nations to rebound economically following the onslaught of the COVID-19 pandemic. With the economy initially taking a significant hit, Egypt’s quick-to-act measures coupled with its relatively strong economic standing pre-pandemic, aided in steering the nation back onto a trajectory of growth.
Meanwhile, political stability continues to play a key role in Morocco’s economic resilience. The establishment of a special COVID-19 combat fund in 2020, which accounted for 2.7% of the country’s GDP, also significantly bolstered its economic resilience, with two-thirds of the fund being contributed by private sources and the remaining by the government.
South Africa, situated at the southernmost tip of the continent, maintains a robust manufacturing and retail base. These sectors are expected to continue providing critical support to the economies of other southern African countries through the supply of goods and services.
Rwanda’s progress can be largely attributed to significant improvements in its operational environment. With various investments being funneled into the construction and energy sectors under the National Strategy for Transformation (NST), Rwanda’s economic outlook remains positive.
Botswana, with its substantial foreign exchange reserves, has weathered the pandemic-induced economic storm more successfully than most. Its Pula Fund, a sovereign fund established in 1994, has played a pivotal role in minimizing fiscal dependency on debt and supporting the budget deficit.
In contrast, Ghana entered the pandemic on a stronger economic footing compared to its African counterparts. Over the past few years, major structural shifts in its economy, especially in the primary sector industries like oil and gold, and accelerated development in the tertiary sector, have set it on the path of significant growth.
The financial sector of Mauritius, aided by an exceptionally favorable tax regime, will remain a primary driver of the country’s economy. Its future growth is anticipated to be fueled largely by cross-border investment activities and banking services.
The economic development of Côte d’Ivoire continues to be propelled by rising private investments, particularly in construction, agri-industry, and services, such as trade, transport, and ICT. This growth is backed by public investment under the 2016-20 National Development Plan.
In Kenya, the government’s dedicated implementation of the “Big Four” plan, with a focus on industrialization, universal health coverage, food security, and affordable housing, is predicted to spur significant economic growth.
Finally, Tanzania, with its rapid development trajectory over the past few years, is also a noteworthy player. This accelerated growth owes much to consistent public investment in vital secondary and tertiary sectors, from energy to telecommunications and finance.
