Fin24

SA still tops for investment in Africa

2012-09-18 14:07

Cape Town - South Africa, Egypt and Nigeria are ranked as the most attractive economies to invest in, according to Rand Merchant Bank’s second edition of Where to Invest in Africa.

The report, which ranks investment destinations across the region, now also analyses North African countries. 

Data for selected emerging and developed nations has been included against which Africa’s performance can be compared, while an assessment is made on how the investment environment has been changing over time - mostly for the better, but sometimes for the worse.

The countries are rated from most to least attractive investment destinations.

Scores are based on: market size, as measured by gross domestic product (GDP) at purchasing power parity: the market growth rate, as reflected in the International Monetary Fund’s forecasts of real GDP growth; and an operating environment index, which looks at economic freedom, corruption, efficiency and business friendliness.

The report finds Rwanda, Ghana and Zambia to be stand-out countries based on continued improvements via reforms and accelerated growth.

Of the three giants of the continent (South Africa, Egypt and Nigeria), South Africa has by far the best operating environment but the slowest growth, as is the general trend in most countries in southern Africa.

The East African Community offers four countries that collectively are large and attractive - Kenya, Tanzania, Uganda and Rwanda - while the most notable North African economies are Tunisia and Morocco.

Libya stands out from a growth perspective, representing the recovery from the civil war. Francophone West and Central Africa rate poorly although Cote d’Ivoire recently entered the growth race after political tensions eased.

Angola has a decent size economy (the third-largest in sub-Saharan Africa) and is growing rapidly, but remains a tough place to do business.

Key sectors of opportunity are also analysed in the report including finance, resources, infrastructure and consumption.

Detailed tables are provided with an extensive range of data, both for Africa and other key countries, together with snapshots of all 54 African countries.

A summary of the ranking results shows that:

  • South Africa tops the rankings, as was the case last year, although the gap continues to close rapidly. It is followed by the next two largest economies on the continent, Egypt and Nigeria.
  • The North African economies, which entered the rankings this year, take many of the top positions. Even with the political problems surrounding the Arab Spring and the resulting decline in their operating index, they remain relatively attractive markets.

Rwanda and Ethiopia’s rankings may come as a surprise: Rwanda is a tiny country, but its reform efforts have been so outstanding that it is reaping rapid rates of economic growth and associated improvements in the business environment.

Ethiopia’s position comes about because of rapid growth and its large population. 

A few countries have worsened in the rankings: Zimbabwe stands out in this regard while Namibia, Swaziland, Benin, South Africa, Guinea, and Gabon stand out as countries where the World Bank and Transparency International report increasing bureaucracy and corruption.

Though Africa is still a desirable investment destination, the sustainability of the recent rebound in its economic growth is questionable as the growth may have more to do with the commodities super cycle than underlying structural adjustments.

Africa will need to fast-track its progress if it is going to compete with other rapidly growing emerging markets, the report said.

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Comments
  • christopher.shining - 2012-09-18 14:30

    Well look around you, there is not too many great peaceful African countries around.

      eduard.homes - 2012-09-18 15:39

      dont compare yourself with the worst countries...up your standards and compare yourself and SA with the best, that is an indication how far behind we really are!!!

  • story.modikwe - 2012-09-18 14:31

    Stop kidding Nigeria? if you want lose everything you worked hard try to invest in Nigeria.

      Ze Don - 2012-09-18 14:52

      Actually Nigeria is growing faster than SA and will soon be the leading economy in Africa.

      eduard.homes - 2012-09-18 15:41

      Yes, I agree. Although Nigeria is not yet on par with SA, it will over take SA, simply because the thieves(ANC) in SA are only getting started on the robbing the country now.

  • Ze Don - 2012-09-18 14:38

    I assume the rankings were calculated pre the mining fiasco. I suspect the picture has already changed...

  • vaughan.lund - 2012-09-18 14:39

    Wow the rest of Africa must be bad

  • mantothieve.missingman - 2012-09-18 14:52

    Hellooooo Have you seen the rest of africa ?

  • Daniel Mah - 2012-09-18 15:00

    finally something to smile about for a moment

  • Frank Hublot Einstein - 2012-09-18 15:21

    @Modikwe being a SAn black in your tiny little shack in a tiny little location in a primitive part of SA, you obviously dont know anything about international investments. There are up to 100 SAn companies in a Nigeria making alot more money than they make in SA. I ll name a few for you. Multichoice, MTN, Telkom,Shoprite, Stanbic bank, Game, Pep, numerous oil servicing companies: Ophir, SACoil, Sasol, DENEL is an a SAn arms manufacturing company. So go back to your little shack in your location and continue with raping 92year old women and leave foreign investments to people who are relevant.

      eduard.homes - 2012-09-18 15:44

      easy there smart guy...did Telkom(government owned) not lose about R1billion in Nigeria? SA has only a handful of companies in Nigeria...have you seen other countries and the amount of companies & MONEY, they make? Korea, Chinese, UK, USA....???

  • Frank Hublot Einstein - 2012-09-18 15:28

    @Modikwe being a SAn black in your tiny little shack in a tiny little location in a primitive part of SA, you obviously dont know anything about international investments. There are up to 100 SAn companies in a Nigeria making alot more money than they make in SA. I ll name a few for you. Multichoice, MTN, Telkom,Shoprite, Stanbic bank, Game, Pep, numerous oil servicing companies: Ophir, SACoil, Sasol, DENEL is an a SAn arms manufacturing company. So go back to your little shack in your location and continue with raping 92year old women and leave foreign investments to people who are relevant

  • Issa - 2012-09-18 15:36

    Africa its our time to do so - but it wont go alone it need commitment of our leaders and the need of developing others.

  • AnthonyfromAfrica - 2012-09-18 15:53

    And 88 % of all investments in SA, come from............The EU !!! Let these radical clowns put that in their pipe and smoke it !!!

  • thulani.ndlovu.3572 - 2012-09-18 19:37

    Lets see the investments trickling down to the ordinary man on the street

      AnthonyfromAfrica - 2012-09-18 20:14

      Ohhh, they sure do !!!!, Hundreds of thousands of South Africans, have a job, due to those investment

  • luca.delbianco.3 - 2012-09-18 19:45

    I can see very few investments at the moment in SA, unless we are talking about Chinese and Indian ones.

      AnthonyfromAfrica - 2012-09-18 20:12

      WHERE are the Chinese investments in SA ?? Or are you talking about China exporting their cheap junk to SA, and than have their own people, doing the .importing, 'wholesaling' 'retailing' and even their own 'hawking'

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