Morocco tops African investment ranking

10 May 2018

Morocco has been named the top investment destination in the African continent, followed by Egypt and Algeria.

Botswana, Cote d’Ivoire and South Africa were the top three countries from sub-Saharan Africa to make the list, coming in at fourth, fifth and sixth place respectively, according to the Africa Investment Index 2018 (AII) from Quantum Global Research Lab.

The AII ranked Morocco first based on its increasing solid economic growth, strategic geographic positioning, increased foreign direct investment (FDI), external debt levels, social capital factors and overall favourable business environment.

Mthuli Ncube, managing director at Quantum, said: “In spite of the improvements to oil production and prices, African economies are turning their attention towards diversification to stimulate industrial development, and to attract investments in non-oil strategic sectors.

“Morocco has been consistent in attracting an inward flow of foreign capital, specifically in banking, tourism and energy sectors and through the development of industry.”

The report cited recent data by the Moroccan Exchange Control showing Morocco attracted nearly $2.57bn of FDI in 2017, up 12% on 2016.

The top five African investment destinations attracted overall FDI of $12.8bn in 2016.

Côte d’Ivoire is also the fastest growing economy in Africa and scored well in terms of liquidity and risk factors such as real interest rate, exchange rate risk and current account ratio.

Ncube said: “Continued FDI inflows will continue to drive the much-needed capital to develop Africa’s primary sectors to meet the demands of the continent’s rapidly growing middle class, and into manufacturing sectors to create more jobs, enhance economic growth and support structural transformation.”

Countries such as Swaziland, Angola, Rwanda, Chad, Comoros, Seychelles, South Sudan and Sierra Leone registered strong improvements in the rankings over the last five years.

When it comes to risk factors Botswana led the index, followed by Swaziland, Morocco, Nigeria and Algeria. These countries’ low risk profiles were determined by improvements to their current account ratio, exchange rate risk, external debt and import cover.

Ethiopia topped the rankings when it came to growth over the past three years, followed by Algeria, Mozambique, Tanzania and Côte d’Ivoire. Ethiopia’s average GDP growth of 8.4% over the last three years was fuelled by substantial investment in public infrastructure and reforms.

Domestic investment reached an estimated 40% of the country’s GDP, for example.

In terms of population, Nigeria, which is home to more than 170m people, leads the rankings. It is followed by Ethiopia, Egypt, Democratic Republic of the Congo and South Africa.

Tunisia, Seychelles, Mauritius, Libya and Over Verdi were ranked as the countries where it is easiest to establish personal and business relationships, based on the rate of penetration by Facebook.

The country with the highest ranked business environment in terms of openness of the economy to trade is Seychelles, followed by Mauritius, Botswana, Lesotho and Namibia.

The countries at the bottom of the ranking (worst to best) were Central African Republic, Liberia, Somalia, Eritrea, Equatorial Guinea, the Gambia, Sierra Leone, Guinea, Sao Tome and Principe and Zimbabwe.

Top 10 investment destinations:

1.      Morocco

2.      Egypt

3.      Algeria

4.      Botswana

5.      Côte d’Ivoire

6.      South Africa

7.      Ethiopia

8.      Zambia

9.      Kenya

10.  Senegal

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