In 2014, Africa received a total of $128 billion, which made it the second biggest destination of Foreign Direct Investment (FDI) capital globally. In 2015, the flow of FDI capital was projected to exceed US$190 billion.
Investment flow into the continent has significantly grown over the last decade in tandem with the high economic growth witnessed by most countries in the region. Much of the investments have been made in the infrastructure, financial services, real estate and consumer-based sectors.
Below are ten of the best African destinations for investors
1. South Africa
Despite facing some economic challenges in recent years South Africa still the most attractive destination for investors on the continent. It has enjoyed political stability since independence in 1994 and it has one of the best rail networks in the world. The nation receives about one-third of the FDI-funded projects in Africa. In 2014, it received about $33.6 billion in FDI capital. Key investors into the Rainbow nation come from United States of America and United Kingdom, followed by Germany and Spain.
After the violent Arab Revolution that led to the fall of former leader, Hosni Mubarak in 2012, the North African economy has been a leading destination for investors since 2014. The country’s government has introduced policies to slash energy subsidies, introduce of new taxes and increased focus on infrastructure projects such as expansion of the Suez Canal. Expansion of railway network and construction of new port facilities have attracted investors. Majority of the investors have been from the United Arab Emirates.
In 2014, the North African economic giant had 67 FDI-funded projects. The nation is strategically located next to Europe, with Spain, France and United States of America being key investors. It has a sound FDI policy and has skilled human-workforce which is available at relatively cheaper cost than in most developed countries. It has greatly benefited from political stability which is one of the biggest attraction incentives to investors in any country. The nation has a sound infrastructure network and its national carrier, Royal Air Maroc has direct flights to over 30 countries across the continent.
It is the largest economy in East Africa. Kenya has attracted investors due to the ease of doing business and a good infrastructural network. The government exempts investors from taxation for ten years after setting up their investments in the nation. They are also allowed to take home all profits during this period. In 2014, the East African nation received 8.5 percent of the total FDI capital in Africa. Landmark projects that have seen huge input by investors include the Standard Gauge Railway and the Lamu Port-South Sudan-Ethiopia Transport corridor are key investments.
Alongside Egypt and Libya, Tunisia is the other North African nation to experience the Arab Spring that started in 2011. In November and December 2014, the country democratically elected a new parliament and president, Beji Caid Essebsi. The government established two free-trade zones to offer benefits to foreign investors and companies similar to the ones offered to offshore exporting companies. It also allows participation of foreign investors in the privatization programme of its state-owned enterprises.
The East African nation has enjoyed political stability since the genocide in 1994. It is one of the fastest growing economies on the continent, at a rate of 6.3 percent. Rwanda’s good performance in provision of healthy business environment, social development and exemplary economic management has attracted investors. The nation adopted legislation which reduced corporate income tax to 15 percent and tax holidays of up to seven years based on the investor’s sector. These have been done to attract investors into the Information Communication and Technology, manufacturing, tourism, transport and agriculture sectors.
7. Ivory Coast
The West African nation has had political stability since Alassane Ouattara was elected president in December 2011, after a four-month period of political conflict when former president, Laurent Gbagbo, refused to concede defeat in presidential elections. Since 2015, it has risen to become a leading destination for investors. It recorded an economic growth of about 9 percent in the same year. This is due to political stability, a steady economic growth of about 8 percent, a stable inflation climate and government policies and structural in both public and private sectors.
The government has improved infrastructure by rebuilding and modernizing the road and rail network. It has a budget of $42.5 billion to improve the sector. It also waives tax for one year for companies that hire fresh graduates. It is ranked 46thout of 189 countries globally in the ease of doing business, a survey conducted by World Bank.
It has been of the the most politically stable democracy in Africa since transition to multiparty in 1992. Ghana is connected to the ocean and acts as a regional transport hub in the West African region. In 2014, it was described by World Bank as the best country for investors in the West African region. It had an economic growth rate of 7.4 percent in 2015. The Ghana Investment Promotion Centre, a government agency has greatly sold the country as a great destination for investors in agricultural, mining, financial, tourism, manufacturing and telecommunications sectors. The discovery of oil has also wooed investors to the nation.
The Southern African country has had a stable government, a steady economic growth and solid infrastructure. There are no foreign exchange controls in the nation and this enables foreign companies to repatriate profits, dividends and capital to their home countries. Foreign investors are offered tax holidays for a period of five to ten years of setting investments in the nation. Botswana has agreements on avoidance of double taxation on foreign investors with South Africa, United Kingdom, Sweden, France, Mauritius, Namibia, Russia and Zimbabwe. These have attracted investors into the nation.
It is an Indian Ocean archipelago. Mauritius has been politically and economically since it became a republic in 1992. Its economic growth rate is 3.6 percent in 2016, an increase from 3.5 percent in 2015. The government introduced deliberate and sound policies to diversify its economy from over-reliance on the sugar industry and also attract foreign investors. The nation is a great tourist attraction for wealthy foreigners who come into the country to set up business or spend holidays. It has great tax benefits with low crime rates. It has a well-developed healthcare system which assures foreigners and investors of quality medical care. It is also considered as a leading tax haven in Africa. Mauritius is one of the easiest countries to enter as a worker or investor in Africa.