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Egypt overtakes South Africa as most attractive investment destination: RMB research

View from the River Nile and Cairo, Egypt. (Image source: Dennis Jarvis/Flickr)

Egypt has seized the number one spot from South Africa as the most attractive investment destination on the continent, according to Rand Merchant Banks (RMB) Investment Attractiveness Index

For the first time, Nigeria and Algeria do not feature in the top 10 of the RMB's Investment Attractiveness Index, which balances economic activity against the relative ease of doing business.

In RMB's seventh edition of Where to Invest in Africa 2018, Egypt displaced South Africa largely because of its superior economic activity score and sluggish growth rates in South Africa, which have deteriorated over the past seven years. Despite mounting concerns over issues of institutional strength and governance, South Africa's currency, equity, and capital markets keep the country a cut above the rest, with many African nations facing liquidity constraints.

Morocco retained its third position for a third consecutive year having benefited from a greatly enhanced operating environment since the Arab Spring which began in 2010.

Surprisingly, Ethiopia, a country dogged by socio-political instability, displaced Ghana to take the fourth spot because of its rapid economic growth and brushed past Kenya as the largest economy in East Africa. Ghana's slide to fifth position was mostly due to perceptions of worsening corruption and weaker economic freedom.

Kenya holds firm in the top 10 at number six. Despite being surpassed by Ethiopia, investors are still attracted by Kenya's diverse economic structure, pro-market policies, and brisk consumer spending growth. Business-friendly reforms aimed at rooting out corruption and steady economic growth helped Tanzania climb by two places to number seven.


Rwanda re-entered the top 10, helped by being one of the fastest reforming economies in the world, high real growth rates and its continuing attempt to diversify its economy. At number nine, Tunisia has made great strides in advancing political transition while an improved business climate has been achieved by structural reforms, greater security and social stability. 

Côte d'Ivoire slipped two places to take up the tenth position. Although its business environment scoring is still relatively low, its government has made significant strides in inviting investment into the country leading to a strong increase in foreign direct investment over the years, resulting in one of the fastest growing economies in Africa.

"These years have exposed a number of African nations to severe economic stress - especially that of liquidity shortages. Unfortunately, there is no quick fix to infuse into a context as complex as this, and traditional forms of revenue will remain a reality for many years to come," said Ronak Gopaldas, RMB Africa analyst and co-author. 

Where to Invest in Africa 2018 also includes 191 jurisdictions around the world and measures Africa's performance relative to other country groupings. The reality is that African countries are still at the lower end of the global-performance spectrum, which continues to be dominated by the US, UK, Australia, and Germany.

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