The theme for Where to Invest in Africa 2018 is “Money Talks” and this edition “follows the money” on the African continent to evaluate aspects crucial to each country’s economic performance. The report mentioned Tanzania to be amongst the best places to invest in due to the reforms introduced by President Magufuli’s government which includes the fight against corruption.
The reforms have helped the country climb the ladder from number 9 to 7 out of the top 10. They take Tanzania as being “a host of business-friendly reforms aimed at rooting out corruption and steady economic growth.”
The report focuses on the main sources of dollar revenues in Africa which allows it to measure the most important income generators and identify investment opportunities.
Notable drop outs from the Top 10 this year are Nigeria and Algeria who have fallen from numbers six and 10 to numbers 13 and 15 respectively. Ethiopia and Rwanda have climbed three and four places respectively.
But probably the most noteworthy change is that South Africa has fallen its first place for the first time since the inception of the report, relinquishing its place to Egypt which is now will be known as Africa’s most attractive investment destination.
Egypt displaced South Africa largely because of its superior economic activity score and sluggish growth rates in South Africa, which have deteriorated markedly over the past seven years. South Africa also faces concerns over issues of institutional strength and governance though in South Africa’s favour are its currency, equity and capital markets which are still a cut above the rest, with many other African nations facing liquidity constraints.
Morocco remains in the third position for a third consecutive year having benefitted from a greatly enhanced operating environment since the “Arab Spring” which began in 2010. Surprisingly, Ethiopia, a country dogged by socio-political instability, displaced Ghana to take fourth spot mainly because of its rapid economic growth, having brushed past Kenyaas the largest economy in East Africa. Ghana’s slide to fifth position was mostly due to perceptions of worsening corruption and weaker economic freedom.
Kenya holds firm in the Top 10 at number six. Despite being surpassed by Ethiopia, investors are still attracted by Kenya’s diverse economic structure, pro-market policies and brisk consumer spending growth.
Rwanda re-entered the Top 10 having spent two years on the periphery, helped by being one of the fastest reforming economies in the world, high real growth rates and its continuing attempt to diversify its economy.
