RMB, in collaboration with the Gordon Institute of Business Science (GIBS), has released the highly anticipated 2024 edition of its Where to Invest in Africa report, a comprehensive analysis of the continent’s top investment destinations.
“Africa is not a country, but a vast, diverse and complex continent with different cultures, economies and investment potential. Our report, therefore, is not a definitive guide, but rather it is designed to provide insight to uncover the underlying drivers of a country’s performance that inform its ranking. This offers invaluable insights for investors, policymakers, and business leaders looking to navigate Africa’s dynamic economic landscape,” says Isaah Mhlanga, Chief Economist at RMB.
Investment decisions need to be viewed through the lenses of both economic performance and operating environment. As a result, the robust methodology used for this edition of the Where to Invest in Africa report builds and expands on previous editions, leveraging new data sets as well as adapting to changing geopolitical and macroeconomic climates.
The report takes into account various factors proven to determine a country’s progress and therefore its investment potential. The scorecard for 2024 highlights 31 countries that collectively represent 92% of the continent’s economic activity and three quarters of its population. It draws on publicly available data sets from global institutions, including the World Bank, the IMF, the African Development Bank, the United Nations, and the International Labour Organisation.
The model is constructed from 20 metrics across four measurement pillars: economic performance and potential; market accessibility and innovation; economic stability and investment climate; and social and human development. Each metric is weighted, which translates into a weight for each pillar, and based on these metrics a standardised scorecard is produced, with rankings that enable effective comparison across Africa’s complex and heterogeneous environment.
Combining these elements results in a ranking across the 31 countries measured. The results show that the two small island economies of Seychelles and Mauritius rank first and second as the most attractive investment destinations on the continent, while the significantly larger economies of Egypt, South Africa, and Morocco rank in third, fourth and fifth places respectively.
Seychelles leads the rankings thanks to high levels of personal freedom, human development, and a stable economic environment. Seychelles offers a unique and attractive investment climate. Despite scoring lower on economic size and potential, second-placed Mauritius is known for innovation, economic freedom, and high GDP per capita. It continues to be a top destination for investors seeking stability and growth opportunities in a well-regulated environment.
Egypt, in third place overall, represents Africa’s largest economy by GDP (2023), offering a substantial market with diverse opportunities in sectors like technology, manufacturing, and services. Its strategic location and economic complexity further enhance its attractiveness. Despite facing significant challenges, South Africa remains a crucial hub for investment in Africa and ranks fourth. Its robust financial sector, diverse economy, and potential for infrastructure development make it a key player. Finally, Morocco’s strong performance in connectedness, innovation, and economic stability positions it as a top investment destination, placing fifth. Its strategic proximity to European markets adds to its appeal.
While Nigeria boasts the continent’s largest population, it no longer tops the rankings as Africa’s largest economy by GDP, following a major currency devaluation, and comes in at ninth place in the overall rankings. Lack of economic complexity remains a challenge as a result of Nigeria’s reliance on oil exports, with petroleum and crude oils making up nearly 70% of its trade flows. In addition, ongoing political instability makes the country a politically fraught place for investors and a challenging business environment. However, there are great rewards available to those who succeed, making it a potentially attractive investment destination, and the ease of doing business in the country continues to improve.
Download the full report here to uncover the insights and drive more informed investment decisions.
Culled from RMB.
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