S.Africa top investment destination in Africa but Nigeria close behind - CNBC Africa

S.Africa top investment destination in Africa but Nigeria close behind

Special Report

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“If you look specifically at South Africa, still a stalwart in terms of size. If you look at operating environment, doing fairly well, but a laggard in terms of market growth rates. Size does matter specifically in our methodology, but it’s one of three components,” Nema Ramkhelawan-Bhana from Rand Merchant Bank (RMB) told CNBC Africa on Monday.

“We also take into consideration forecasted growth rates as well as the operating environment. We take an objective stance when looking at the operating environment, so it’s not just simply a macroeconomic assessment of where the most attractive investment destination is. We also overlay the ease of doing business, and that’s based on four objective international surveys.”

According to the [DATA RMH:RMB] third annual report on where to invest in Africa, South Africa remains the number one investment destination in Africa but Nigeria could overtake South Africa in the near future due to a rebasing exercise it’s currently undergoing.

Nigeria’s growth rate prediction in the next two to three years is at an excess of six per cent, whereas South Africa’s is only at three per cent.

Nigeria is currently ranked in second place, followed by Egypt in third, Ghana in fourth and Morocco in fifth place in terms of attractive investment destination.

 “In terms of your top 10, Ghana is the one to look out for particularly. In terms of its size, very small compared to the likes of Egypt, Nigeria and South Africa- which make up over half of Africa’s GDP if you were to measure it- but still growing phenomenally well. If you had to look at its competition in the top five, certainly something to keep in the back of your mind,” Ramkhelawan-Bhana explained.

Countries such as Sierra Leone and Cameroon are however deteriorating in terms of ranking due to their forecasted growth rates, which take into consideration aspects such as investment, how the countries are going to develop internally and their operating environment.

“Your operating environment is what spurs optimism, what gives confidence to investors about actually doing business practically and on the ground. That is what sets economies apart,” said Ramkhelawan-Bhana.