SOUTH AFRICA LOSES TOP SPOT TO EGYPT ON ‘WHERE TO INVEST IN AFRICA’ LIST

SOUTH AFRICA LOSES TOP SPOT TO EGYPT ON ‘WHERE TO INVEST IN AFRICA’ LIST

JOHANNESBURG – The where to Invest in Africa 2018 report released on Monday by Rand Merchant Bank (RMB) showed that South Africa has fallen from first place for the first time since the inception of the report, ceding its place to Egypt which is now Africa’s most attractive investment destination.

However, the continents other powerhouse Nigeria moved outside the top 10 investment destinations on the continent for the first time, with RMB attributing this to the country’s short-term investment appeal having been eroded by recessionary conditions.

RMB said Egypt displaced South Africa largely because of its superior economic activity score and sluggish growth rates in South Africa, which have deteriorated markedly over the past seven years.

Celeste Fauconnier, an analyst at RMB Africa, on Monday said that some countries have been more nimble and effective than others in managing shortfalls.

“Over the past three years, some African governments have had to implement deep and painful budget cuts, announce multiple currency devaluations and adopt hawkish monetary policy stances – all as a result of a significant drop in traditional revenues,” Fauconnier said. Earlier this month, both South Africa and Nigeria moved out of recession after improved second-quarter gross domestic product (GDP) data.

Earlier this year, audit firm EY in its Attractiveness Program Africa 2017 found that South Africa, Morocco, Egypt, Nigeria and Kenya collectively attracted 58 percent of the continent’s total FDI projects in 2016. South Africa saw an increase of 6.9percent in FDI projects in the period compared to 2015 – accounting for 20.6percent of all projects undertaken in the continent in the period under review.

The RMB report further found that in South Africa’s favour are its currency, equity and capital markets which are still a cut above the rest, with many other African nations facing liquidity constraints.

Rounding off the top ten investment destinations on the continent according to the RMB report was Morocco which retained its third position for a third consecutive year, while Ethiopia displaced Ghana to take the fourth spot mostly because of its rapid economic growth, having brushed past Kenya as the largest economy in East Africa.

Ghana took the fifth position with Kenya coming in at number six while Tanzania climbed two places to number seven and at number eight was Rwanda. The last two spots in the top 10 were taken by Tunisia at number nine with Cote d’Ivoire slipping two places to take up the tenth position.

– BUSINESS REPORT / KABELO KHUMALO

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Adekunle Owolabi
Adekunle Owolabi 559 posts

Adekunle Owolabi studies democracy, human rights, public opinion, political behavior, civil rights and policy aimed at improving the human condition, with a focus on African countries.

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