South Africa is no longer the best place to invest in Africa

·19 Sep 2017

South Africa has been knocked off the top spot of best investment destination on the African continent, according to the latest Where to invest in Africa report by Rand Merchant Bank (RMB), for 2018.

This marks the first time since the report was started that South Africa did not top the list, giving way for the rise of Egypt, which is now the continent’s number one investment destination.

According to RMB, Egypt has moved ahead of South Africa mainly because of a combination of its (Egypt’s) larger economic score, and South Africa’s creeping growth rates, which have continued to decline for the better part of a decade.

It’s not all bad news for South Africa, however, with the RMB report pointing out that the country is still ahead of its contemporaries in terms of currency, equity and capital markets.

South Africa’s troubles are well-known and well-reported, with slow growth, high levels of unemployment and poverty, underpinned by a turbulent political landscape.

The country has managed to claw its way out of a short-lived technical recession in the second quarter of the year, but economists and analysts have warned that its woes are far from over.

Deloitte’s managing director of emerging markets and Africa, Martyn Davies has warned that the country is bearing striking similarities to fellow emerging market, Brazil, which has been on a constant decline, deeper into junk status.

Davies warned that, unless the government made effective and wide-sweeping changes, South Africa could be on the same path, albeit with a 2-year lag on Brazil.

Despite this negative outlook, other analysts are slightly more up-beat, saying that even though the negatives can’t be ignored, South Africa’s mature capital markets still offer investors great returns, particularly on government bonds.

These are the top 10 Africa countries to invest in, according to RMB: