RMB has released its highly anticipated 2024 Where to Invest in Africa report, offering a comprehensive analysis of the continent’s prime investment destinations. Developed in collaboration with the Gordon Institute of Business Science (GIBS), the report uses updated data sources and methodologies to evaluate a country’s progress and investment potential.
‘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 is designed to provide insights 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,’ says Isaah Mhlanga, Chief Economist at RMB.
The methodology for the 2024 edition builds on previous reports, incorporating new data sets and considering evolving geopolitical and macroeconomic climates. The scorecard for this issue highlights 31 countries, representing 92 percent of the continent’s economic activity (measured by GDP) and more than one billion people (three-quarters of Africa’s population). Data is drawn from global institutions, including the World Bank, IMF, African Development Bank, United Nations, and International Labour Organisation.
The model uses 20 metrics across four measurement pillars: economic performance and potential; market accessibility and innovation; economic stability and investment climate; and social and human development. Each metric is weighted, creating a standardized scorecard that enables effective comparison across Africa’s diverse environments.
Top five investment destinations
The report ranks Seychelles and Mauritius as the top two investment destinations, followed by Egypt, South Africa, and Morocco. Seychelles leads due to high levels of personal freedom, human development, and a stable economic environment. Mauritius, despite scoring lower on economic size, is known for innovation, economic freedom, and high GDP per capita.
Egypt, Africa’s largest economy by GDP, offers diverse opportunities in sectors like technology, manufacturing, and services. South Africa remains a crucial investment hub due to its robust financial sector and potential for infrastructure development. Morocco’s strong performance in connectedness, innovation, and economic stability, along with its proximity to European markets, secures its position in the top five.
Investment archetypes
The report categorises African markets into five investment archetypes based on shared characteristics:
- Highflyers: Established economies like Nigeria, South Africa, Egypt, and Ethiopia, offering stability and a range of investment opportunities.
- Cleared for take-off: High-growth potential countries like Senegal and Côte d’Ivoire, driven by young populations and abundant resources.
- People potential: Markets with large, youthful populations, such as Kenya, DRC, and Uganda, offering significant consumer bases and future workforces.
- Global connectors: Advanced economies like Morocco, Mauritius, Tunisia, and Seychelles, with strong international ties.
- Low-base boomers: Smaller markets like Rwanda, Mozambique, and Benin, with high growth potential but also higher risk.
Trends and insights
The report also highlights trends such as the role of innovation and economic complexity in driving growth. Countries like South Africa, Kenya, and Ghana are noted for their technological advancements and economic diversification, making them attractive for investment.
The African Continental Free Trade Agreement (AfCFTA) is expected to boost intra-African trade, enhancing economic integration and creating a more competitive continental market. Africa’s young and growing population presents a unique opportunity for economic growth, with countries like Ethiopia, Tanzania, and Uganda poised to benefit if they can create sufficient employment opportunities.
Emerging markets like Nigeria, Ghana, and Kenya offer substantial opportunities despite challenges like political instability and infrastructural deficits. Africa’s vast natural resources, including minerals and arable land, are pivotal for sustainable economic growth, though the report cautions against the ‘resource curse’ and emphasises good governance and strategic management.
Infrastructure and technology
Investment in infrastructure, particularly in transportation, energy, and digital networks, is crucial for unlocking Africa’s economic potential. South Africa, Kenya, and Nigeria are identified as key markets where infrastructure development could yield significant returns.
Africa’s rapid urbanisation and embrace of new technologies are creating new investment opportunities, especially in the tech sector.
‘The richness of Africa’s diversity makes fully analysing its nuance and contrast a challenging task, but an important one when it comes to understanding the varied markets that make up this vast regional economy. The 2024 RMB Where to Invest in Africa report aims to develop a balanced, robust and actionable view of the drivers, challenges, and opportunities that characterise each of the 31 African markets included in the analysis, Mhlanga concludes.
Download the full report here to uncover the insights and drive more informed investment decisions.
