A new study by South Africa’s Rand Merchant Bank has ranked Kenya, Rwanda and Tanzania among Africa’s most attractive destinations in 2019 taking fifth, sixth and seventh positions respectively.
The RMB Investment Attractiveness index ranked Kenya the best in East Africa due to the political tranquility experienced after the 2017 election.
In assessing the most attractive investment environments in Africa, RMB considered two important conditions for viable investment – economic activity and the operating environment.
Rwanda was ranked second and was also rated the fastest growing economies due to its government’s massive support and channeling of funds to the domestic industries.
Tanzania was rated third due to what the report cited as “government tax breaks, development of special economic zones, investment in public infrastructure and growth in the services sector as incentives for foreign investors. “
South Sudan is the worst rated country in Eastern Africa to do business in on the continent owing to its prolonged political instability.
Egypt was ranked top in terms of investment attractiveness, the second time in a row, “boasting the largest consumer market of approximately 100 million people and a diversified economy which attracts a lot of investment.”
South Africa retained its second position. According to Celeste Fauconnier, the author of the publication; “ South Africa is currently a hot spot for FDI, with President Ramaphosa’s efforts to build a $100bn book of foreign and domestic investments project on track,the country’s currency and capital markets remain a cut above the rest of the African countries”
Morocco came in third, “With a growth-rate expectation of 4 per cent over the medium term, Morocco’s operating environment and investment appeal have been greatly enhanced since the Arab Spring”.
However, Neville Mandimika, RMB Africa analyst and co-author of the publication noted that Africa is experiencing slow growth due to poor financing, corruption, inadequate infrastructure and bad governance.
“Although findings reveal a slight improvement to the overall operating environment, access to financing, corruption, weak governance and inadequate efficient infrastructure remain problematic factors for doing business in Africa,” she said.
Mandimika added that critical sectors like agriculture provide opportunities for long-term growth prospects.
“The agricultural sector will become a more enticing investment target as agro-processing increases and global food demand spikes.” she added.