Real Estate Investor Magazine South Africa March/April 2020 | Page 53
business has contributed to their relative underperformance
and, in addition, South Africa is enduring a cyclical downturn.
Tanzania’s fall from grace has reshuffled the top ten
investment destinations, with Tunisia returning to the fold at
number ten while Côte d’Ivoire and Ghana edge ever-closer
to the top five. North Africa remains dominant with Morocco
displacing South Africa in the rankings, rising to second place.
Key sectors to unlocking the
continent’s growth potential
Construction
Finance
Information, Communication & Technology
Manufacturing
Resources
Retail
5
Rwanda
Rwanda has the second-best business environment
in Africa. According to the World Bank’s operating
environment scoring, the country has more than
doubled the efficiency of its business environment in less
than a decade. The government has also invested heavily
into its domestic industries, while FDI has increased over the
same period, pushing Rwanda to being one of the five fastest-
growing economies on the continent.
6
Ghana
The growth outlook is strong, concentrated around
the oil and gas sector. Non-oil growth will pick up
again, supported by pro-business reforms and a
steady improvement in power supply. Political stability
will remain underpinned by Ghana's strong democratic
credentials. Regardless of a recent deterioration in its operating
environment rankings, Ghana remains one of the easier
business environments in Africa.
1 7
2 8
3 9
Top 10
Egypt
The enormity of the market paired with a sophisticated
business sector relative to other countries makes
Egypt the most attractive investment destination in
Africa. The improvement in Egypt’s business environment,
facilitated through government programmes, combined with
the progressive increase in investment from the private sector
has enhanced economic growth and assisted in repositioning
Egypt on the global investment map.
Morocco
While only Africa's fifth-largest market, Morocco’s
expected growth rate of 4% over the medium term
and its greatly-enhanced operating environment has
served the country well since the Arab Spring. Its reintegration
into the African Union and accession to the Economic
Community of West African States (ECOWAS) have enhanced
its investment appeal.
South Africa
South Africa has slipped another place in this year’s
rankings, stymied by depressed levels of growth and a
lack of structural reform. Yet it remains Africa's hotspot
for portfolio investment. With many countries facing severe
liquidity constraints, South Africa’s financial markets and level
of financial inclusion are still a cut above the rest.
4
Kenya
The above 5% expected growth rates, helped by
favourable weather and political reconciliation after
2017’s disputed elections, has propelled Kenya one
spot higher than 2019. The economy benefits from diversity
as well as a sustained expansion in consumer demand,
urbanisation, East African Community (EAC) integration,
structural reforms and investment in infrastructure, including
an oil pipeline, railways, ports and power generation.
Côte d'Ivoire
Côte d'Ivoire is one of the more diversified economies
in francophone Africa. Its strong growth rates are
supported by the government's pro-business reforms
and a relatively stable political context. Large infrastructure
projects, particularly in transport and energy (financed by
foreign investment, aid inflows and the government) also
support the country's strong position in our rankings.
Nigeria
Nigeria retains its top ten ranking due to improved
macroeconomics, supported by recovering oil prices
and production. As the largest economy in Africa
in nominal terms, the possibility for investment cannot be
overlooked; and with the largest population on the continent,
domestic demand continues to rise. Resources and favourable
demographics are attracting strong flow of FDI. The liquidity
crunch has subsided since 2017 as commodity prices
have recovered and changes in FX regulations have been
implemented.
Ethiopia
Ethiopia is the fastest-growing economy on the
continent. With a population of almost 100 million
people, demand for goods and services is rising
significantly. The prohibition of foreign ownership in key
sectors is still a constraint for investment, but this is slowly
changing. The government has announced shake-ups across
industries, including plans to open up the once closely-
guarded telecommunications and power monopolies.
10
Tunisia
Tunisia re-enters within the top ten supported
by a reasonable market size and favourable
operating environment. The government's
encouragement of foreign investment, through its new
simplified investment code, has made the country increasingly
attractive to multinational manufacturers.
SOURCE RMB
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