“Structural change is essentially the only hope for sustainable growth in Africa,” says Celeste Fauconnier, who, along with fellow RMB Africa Analyst, Neville Mandimika, have co-authored RMB’s new Where to Invest in Africa report.

Download the full report.

The report begins by assessing each African economy’s investment potential. RMB’s Investment Attractiveness Index does this by overlaying macroeconomic fundamentals with the practicalities of doing business on the continent.

The top 10 investment attractiveness-ranked countries:

1. Egypt is Africa’s largest economy GDP-wise, boasting the biggest consumer market in the Middle East and North Africa, its diversified economy receiving large FDIs.
2. South Africa is also still an FDI hot spot, with the country’s currency and capital markets a cut above the rest of Africa’s, according to Fauconnier. But she warns that subdued economic growth and this year’s upcoming elections have created political-party divisions, which hamper policymaking.
3. Morocco is Africa’s fifth-largest market, which, with its medium-term growth-rate expectation at 4%, boasts an enhanced operating environment and investment appeal.
4. Ethiopia is set to be the fastest-growing economy in Africa, averaging 8.2% for the next six years – a slight normalisation from the 10% average experienced over the past decade. The robust momentum is supported by improved macroeconomic policies and higher government investment in local industries and human capital.
5. Kenya delivered a diverse economy and sustained expansion in consumer demand, urbanisation, EAC integration, structural reforms and infrastructure development, which include an oil pipeline, railways, ports and power generation.
6. Rwanda is another fast-growing economy, boasting the second-best business environment. Although a small market, the government is investing heavily into its domestic industries, with a significant increase of FDI recorded over the past decade.
7. Tanzania is expected to grow at 6.5% over the next five years. The economy is expected to overtake Kenya’s, supported by its resource-based manufacturing, tax incentives and development of special economic zones.
8. Nigeria jumped back into the top 10 due to improved macroeconomics, supported by recovering oil prices and production and favourable demographics attracting FDI.
9. Ghana has strong growth rates concentrated around the oil and gas sector, while the non-oil sector growth is supported by pro-business reforms.
10. Côte d’Ivoire also has strong growth rates, supported by large infrastructure investment, particularly in transport and energy.

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