Egypt’s economy is diversified and receives large amounts of foreign direct investments (FDI), a newly released report by the Rand Merchant Bank (RMB) stated, adding that Egypt, South Africa, and Morocco maintained their positions as the top three countries at RMB’s 2020 investment attractiveness ranking for Africa.
Egypt retained the stop spot as the largest African market in GDP terms, boasting the largest consumer market in the Middle East and North Africa. The report asserted, noting that strides have been made to improve the investment and legal business environment.
The authorities succeeded in improving the availability of hard currency to service debt and the depreciation of the Egyptian pound since its flotation in 2016, despite some challenges, the report stated.
RMB’s report reassured the importance of focusing on the need for efficient infrastructure as it is key to uncovering opportunities and unlocking Africa’s growth potential.
As Africa’s second-best destination to invest in, South Africa is currently a hot spot for FDIs as the country is on track target to lure $100bn of foreign and domestic investments. The report warned that subdued economic growth and the upcoming 2019 elections created political party divisions, which hampered policymaking.
Africa’s fifth-largest market, Morocco, is still ranked third in the 2020 report. With a growth-rate expectation of 4% over the medium term, Morocco’s operating environment and investment appeal have been greatly enhanced since the Arab Spring, the reintegration into the African Union, and the accession to the Economic Community of West African States.
The report’s analysis of individual African countries revealed that 11 African countries are forecasted to grow above 6%. Ethiopia is set to be the fastest-growing economy in Africa, averaging 8.2% for the next six years.
The robust momentum is supported by improved macroeconomic policies and higher government investment in local industries and human capital. Private investment continues to increase after the resolution of the long-standing conflict with Eritrea.
The report found no real improvements in operating environments across Africa. The top five performers in terms of operating environments were Mauritius, Rwanda, Botswana, South Africa and the Seychelles. Mauritius is now in its 11th year of being the easiest business environment in Africa, and it keeps improving.