Revealed: The best African countries to invest in during 2020

South Africa, once a beacon of economic growth and development in Africa, is now facing challenges as it struggles to maintain its position as a top investment destination on the continent. According to Neville Madimika, the RMB Sub-Saharan African economist, South Africa's third position in the investment landscape is at risk, with countries like Egypt and Morocco outpacing it in terms of growth and attracting foreign direct investment (FDI). During a recent interview on CNBC Africa, Madimika highlighted the impressive economic strides made by Morocco, which has emerged as a key player in sectors such as aircraft manufacturing, food exports, electronics, and automotive industry. Egypt, on the other hand, continues to lead the pack in attracting investment and driving economic growth at a rate significantly higher than South Africa's. Madimika pointed out that South Africa's decline in investment attractiveness can be attributed to a combination of factors, including ongoing issues with power utility Eskom and national carrier SAA, as well as broader structural challenges in the economy. He emphasized the importance of presenting a compelling narrative to international investors, showcasing efforts to address domestic issues and improve the investment climate. The conversation also touched on the potential of other African countries, such as Sierra Leone, to emerge as attractive investment destinations. Sierra Leone, recovering from the impact of the Ebola virus, is restructuring its mining industry and exploring opportunities in precious metals and battery minerals, garnering interest from investors. Looking ahead, Madimika underscored the need for South Africa to focus on stimulating economic growth and enhancing the ease of doing business to compete effectively with other African economies. While South Africa has made progress in certain areas, such as establishing investment promotion initiatives, there is a critical need to address underlying structural issues and boost investor confidence. As South Africa prepares for its budget speech in February, the spotlight is on the government's economic plan and commitment to fiscal stability. Madimika acknowledged the challenges ahead, noting the importance of proactive measures to avoid credit rating downgrades and capital outflows. In conclusion, the key takeaway from the interview is that South Africa must heed the lessons from countries like Morocco and Egypt, which have successfully positioned themselves as attractive investment destinations through strategic economic policies and targeted growth initiatives. By leveraging its strengths and addressing weaknesses, South Africa can reclaim its status as a leading hub for investment in Africa.