The sheer size of its market, accompanied by a relatively sophisticated business sector relative to its neighbours makes Egypt the most attractive investment destination in Africa.
This is according to the latest Investment Attractiveness Rankings by Rand Merchant Bank (RMB), an investment and corporate banking arm of South African-based First Rand Bank Limited.
Egypt tops the list of most attractive African countries to invest in for the third year running, according to the RMB 2020 investment report, released this January.
Egypt is followed by Morocco (2), South Africa (3), Kenya (4), Rwanda (5), Ghana (6), Côte d’Ivoire (7), Nigeria (8), Ethiopia (9) and Tunisia (10).
The RMB Report titled Where to Invest in Africa 2020 provides data and analysis to firms investing in Africa and points out new opportunities to those already vested in the continent.
RMB traces Egypt’s rise to improvements in its business sector as evident in the country’s eight-place leap in the World Bank’s Ease of Doing Business rankings.
Egypt’s attractiveness supersedes the Bahamas, Thailand, Australia, Taiwan and Poland.
On a country-by-country basis, Egypt has the most projects by number at 46 (9.5% of projects on the continent) as well as by value at US$79.2billion or 17 per cent of the continent’s value. It thus edges out South Africa and Nigeria respectively.
Construction continues to be the main driver of economic growth in Egypt, with the sector recording gains of 10 percent in 2018 — almost double the average growth rate of other sectors.
The most notable construction projects are the US$3.8billion Mountain View City in New Cairo and the US$3.7billion Citadel Refinery in Cairo.
A number of other projects have recently been announced, most of which align with the trend of private developers targeting higher-end residential projects.
Hyde Park Real Estate has launched Park Corner, a US$563.2 million residential project in New Cairo. The project, covering 533,000m2, will have 205 independent villas, townhouses, and twin houses; 1,400 apartments; and 300 duplexes and family villas.
Egypt-based Wadi Degla Developments, part of Wadi Degla Holding Company, is set to build a US$39m residential project, called Promenade Maadi Compound, in the country’s Zahraa Maadi region.
Work is expected to take more than five years to complete.
Egyptian Palm Hills Development Company has entered an agreement with the New Urban Communities Authority (NUCA) to develop an integrated residential project in eastern Cairo on a revenue-sharing basis.
The 2.02km square scheme is co-developed with the Ministry of Housing and is expected to attract more than US$4.4billion of investment.
In April 2016, real estate developer Capital Group Properties launched a US$4.5billion residential scheme called Alburouj, which involves building 30,000 homes on 4.9km2 between the city of Suez and Ismailia Desert road.
RMB Investment Attractiveness Rankings shows that Guinea, Mozambique and Djibouti recorded the strongest gains, with notable advancements in certain aspects of their operating environments.
The rankings are as instructive on the downside, identifying countries that have either stagnated or outright deteriorated in one or all aspects of our methodology.
Changes in rankings
South Africa, Ethiopia and Tanzania are among the more prominent countries to have moved downward.
A deterioration in the ease of doing business has contributed to their relative underperformance, and South Africa is also enduring a cyclical downturn.
Tanzania’s fall from grace has shuffled the top ten investment destinations, with Tunisia returning to the fold at number ten while Côte d’Ivoire and Ghana edged closer to the top five.