For so long, Africa has been viewed as the dark, poor, and war-ravaged continent where no meaningful investment can thrive. However, this narrative is slowly changing as more multinational firms continue to emerge across the continent.
The growing business environment in Africa is attracting investors from all over the world, whose operations have helped to create employment for the ever-expanding African working class and to contribute to Africa’s GDP.
As more foreign investors look towards Africa for their next investment destination, they are interested to know which African countries will guarantee them the most favorable return on investment.
In a recent report dubbed Africa Attractiveness program 2016, Ernst & Young – a UK-based financial consulting firm – listed the top 20 African countries that investors should consider for their investments.
Business-Friendly Countries in Africa
Based on ongoing macroeconomic pressures and efforts being put in place to ensure long-term development, the report ranks South Africa as the most preferred investment destination in Africa.
Although South Africa is currently experiencing low economic growth – largely due to poor governance – Ernst & Young argues that the country is still the most developed economy in the continent.
The report ranks Morocco and Egypt as the second and third best African countries to invest in despite their current economic pressures. The two North African nations are known to have a relatively business-friendly environment and good infrastructure.
In West Africa, Ghana appears to be doing quite well in terms of business enablement, largely due to its strong governance track record. Ivory Coast’s strong economic growth and impressive forecasts, moderately good infrastructure, and business-friendly environment have led to an upsurge in investors.
But surprisingly, Nigeria – Africa’s largest economy and one of its most resilient – is underperforming in critical areas such as business enablement, governance, and human development.
In East Africa, Kenya ranks as the most investment-friendly economy followed by Rwanda, despite its small market. According to the report, Kenya is leading other East African countries in key areas such as economic growth, infrastructural development, and business enablement.
Although Ethiopia, Uganda, and Tanzania are among the top 10 African countries with the highest macroeconomic resilience, they are not doing so well in long-term development indicators such as governance, infrastructure, diversification, and business enablement.
Despite their seemingly smaller markets, Botswana and Mauritius have a strong track record in key areas such as social development, economic management, and business enablement.
Other African countries identified as potential investment destinations include Tunisia, Senegal, Algeria, Zambia, Namibia, Benin, and Mozambique.