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Top 10 investment destinations in Africa:

Quantum Global Research Lab — Quantum Global’s independent research arm, has recently released its 2018 Africa Investment Index, in which African countries are ranked based on their investment potential. The results may shock you.

The Africa Investment Index, developed in 2017, is an integrated tool that measures multidimensional concepts for assessing the investment attractiveness of African countries over time. This annual index aids in creating an image of investment attractiveness for African countries. Beyond this, it also aids in guiding policymakers in setting or revising policies to better attract FDI, benchmarking and monitoring their country’s performance relative to peers. According to the report, the Index is base off of 6 criteria: growth factors (domestic investment, size of the economy, economic growth); liquidity factors (real interest rate, excess money supply); risk factors (exchange rate risk, import cover, external debt, current account ratio); business environment factors (ease of doing business, trade openness); demographic factors (population); and a measure of social capital using the Facebook penetration rate.

These are the top 10 investment destinations in Africa:

  1. Morocco
  2. Egypt
  3. Algeria
  4. Botswana
  5. Cote D’ Ivore
  6. South Africa
  7. Ethiopia
  8. Zambia
  9. Kenya
  10. Senegal

The worst countries to invest in are Zimbabwe, Sao Tome and Principe, Guinea, Sierra Leonne, Gambia, Equitorial Guinea, Eritrea, Somalia, Liberia and the Central African Republic.

 

Observations and comments:

Morocco ranked in first due to its strong business environment, size of the economy (fifth largest in Africa) and its social capital. Egypt has a low exchange rate risk, a strong open economy and domestic investment activity. The report states that “FDI flows into equity remain strong, pointing to the importance of the country as an investment destination”. Cote d’ Ivoire has the fastest growing economy in Africa, shown in its ranking as fifth of the list. Interestingly, while South Africa is in the top 3 for the strongest African economies, it ranked as number 6 on the list. While they did not make the list, Angola and Nigeria received mentions for their strong improvement. Angola has shown the strongest improvement out of all 54 African countries due to its economic recovery. Nigeria’s economic recovery as a result of higher oil prices has also been commended.

 

What do you think of the top 10 investment destinations in Africa? Let us know in the comments below!

 

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