Nigeria misses top 5 cut in Africa’s investment attractiveness rankings

• Seychelles, Mauritius, Egypt, South Africa and Morocco earn top spots

 Onome Amuge

Nigeria, despite its substantial economic might, has failed to secure a top-five spot among Africa’s most attractive investment destinations. In contrast, the small island nations of Seychelles and Mauritius have emerged as the first and second most attractive investment destinations on the continent, while the larger economies of Egypt, South Africa, and Morocco have claimed the third, fourth, and fifth positions respectively, highlighting the growing competitiveness of smaller African countries and the challenges facing larger economies like Nigeria in attracting foreign investment.

The analysis of Africa’s top investment destinations is based on RMB’s 2024 edition of the ‘Where to Invest in Africa’ report. The comprehensive report, compiled by RMB, a leading financial services holding company operating across the African continent provides a thorough examination of the most attractive investment opportunities and trends in Africa.

RMB’s analysis as presented in the report, assesses a total of 31 countries, covering 92 percent of Africa’s economic activity and home to over one billion people, representing approximately 75 percent of the continent’s population. 

Moreso, the report draws on publicly available datasets from global institutions, including the World Bank, the International Monetary Fund (IMF), the African Development Bank (AfDB), the United Nations (UN), and the International Labour Organisation (ILO).

RMB’s report uses a comprehensive model consisting of 20 metrics, grouped under four key pillars: economic performance and potential, market accessibility and innovation, economic stability and investment climate, and social and human development. Each metric has an assigned weight, contributing to the overall weight of its respective pillar.

By considering the metrics in all four pillars and producing a standardized scorecard, RMB established a comprehensive ranking of the 31 countries analysed.  The results reveal that Seychelles and Mauritius, both small island economies, emerged as the top two most attractive investment destinations in Africa. Larger economies such as Egypt, South Africa, and Morocco followed suit, occupying the third, fourth, and fifth positions in the ranking, respectively.

The ‘Where to Invest in Africa’ report attributes Seychelles’ top ranking to its strong performance across several key indicators. The country boasts high levels of personal freedom, human development, and a stable economic environment, resulting in an appealing investment climate. 

The report also indicated that Mauritius, despite its relatively small economic size and growth potential, has earned a strong reputation for innovation, economic freedom, and high GDP per capita. These factors, combined with the country’s commitment to stability and a well-regulated environment, have made Mauritius an attractive destination for investors seeking growth opportunities and a safe haven for their capital. 

The report’s analysis of the top five investment destinations in Africa continues with Egypt, the continent’s largest economy by GDP as of 2023. The report noted that Egypt offers investors a range of attractive options, given its substantial market, diverse investment opportunities in sectors such as technology, manufacturing, and services, and strategic location, earning it a third place ranking amongst investment destination spots in the continent.

The report acknowledged that South Africa, despite facing a number of challenges, remains a vital investment destination in Africa. It noted that the country’s sophisticated financial sector, diversified economy, and potential for infrastructure development position it as a critical player in attracting investment on the continent. 

Morocco, the fifth most attractive investment destination according to the report, benefits from its strong performance in indicators such as connectedness, innovation, and economic stability. This is also as the country’s strategic location, close to both European and African markets, enhances its appeal for investors seeking to expand into or leverage the African market.

Developed in partnership with the Gordon Institute of Business Science (GIBS), the ‘Where to Invest in Africa’ report utilises a robust and data-driven methodology to determine a country’s progress and investment potential. The methodology was also updated to reflect new data sources and incorporate a range of factors that have been proven to influence a country’s development and its attractiveness as an investment destination.

Commenting on the report, Isaah Mhlanga, chief economist at RMB, noted:  

“Africa is not a country, but a vast, diverse and complex continent with different cultures, economies and investment potential. Our report therefore is not a definitive guide, but rather it is designed to provide insight to uncover the underlying drivers of a country’s performance that inform its ranking. This offers invaluable insights for investors, policymakers, and business leaders looking to navigate Africa’s dynamic economic landscape.”