SA is Africa’s third most attractive investment destination – report

South Africa was ranked as Africa’s third most attractive investment destination, according to the Where to Invest in Africa 2021 report from RMB.

The report showed that Egypt is Africa’s top investment destination with Morocco following in second place. Rounding up the top five are Rwanda and Botswana in fourth and fifth positions respectively.

The positive global sentiment that saw the year 2020 in was short-lived when Covid-19 and lockdown legislation demanded a new sociological construct that chanes the work-life balance.

The pandemic brought into sharp focus the vast disparities in access to basic health and wellbeing services across countries. It was also a catalyst for the adoption and utilisation of technology as a means of communication.

RMB Africa economist Daniel Kavishe said the 2021 report assesses the extent of the pandemic’s impact by sketching Africa’s landscape before Covid-19 and then paints a picture of both its actual and potential outcomes through and post pandemic.

The pandemic has muddied the analytical waters and compelled the team to adapt their methodology.

Kavishe said, “We created a new set of rankings that incorporated some of the unavoidable Covid-19-induced challenges, of which the operating environment score was one”.

A fiscal score which was a part of the methodology are important indicators of how governments respond to Covid-19.

The report also explored key themes emanating from Africa’s developmental aspirations which are government intervention, a focus on triple-threat sectors and healthcare.

“The inclusion of a fiscal score in our rankings aimed to score governments’ fiscal positions and provided a basis from which investors can understand specific jurisdictions,” Kavishe said.

Here is a look at the top 10 countries that are attractive for investment:

1. Egypt: While Egypt’s economy was hard hit by the pandemic, it was also one of the first to bounce back to a path of growth due the measures that were introduced and it has been on a stronger footing at the outbreak of Covid-19.

2. Morocco: The economy of Morocco continues to benefit from political stability. A special fund to combat Covid-19 was established in 2020, representing 2.7 percent of GDP.

3. South Africa: South Africa offers a strong manufacturing and retail base that will continue to support southern African regional economies with goods and services.

4. Rwanda: Rwanda continues to benefit from the efforts it has made to improve its operating environment. As a part of the country’s National Strategy for Transformation, various investments should support the construction and energy sectors over the next few years.

5. Botswana: The country has high foreign-exchange reserves, which have enabled it to weather the pandemic-induced economic storm better than most. The Pula Fund a sovereign fund created in 1994 has meant that fiscal dependency on debt has been low.

6. Ghana: Ghana entered the current crisis on a relatively stronger footing than its African peers. Its economy has seen major shifts over the past few years, positioning it for significant growth going forward. This is supported by primary-sector industries like oil and gold but accelerated development in the tertiary sector.

7. Mauritius: Aided by an extremely favourable tax regime, its financial sector will remain one of the main drivers of Mauritius’ economy into the future – notably through cross-border investment activities and banking services.

8. Côte d’Ivoire (CIV): A rise in private investment should continue to fuel construction, agri-industry and services. Private investment will benefit from the impetus provided by public investment under the 2016-20 National Development Plan.

9. Kenya: The Kenyan government’s efforts to ensure that implementation of the “Big Four” plan focused on industrialisation, universal health coverage, food security and affordable housing will lead to fast economic growth.

10. Tanzania: Tanzania has been on a rapid path of development over the past few years. This growth can be attributed to consistent public investment from the government in key secondary and tertiary sectors, ranging from the energy sector to advancements in the telecommunications and finance sectors.

BUSINESS REPORT ONLINE

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