The best African countries to invest in have been historically evaluated by investors according to the pillars of economic activity and the operating environment for businesses.
Presently, the methodology for the best African countries to invest includes a higher level of sophistication, taking into consideration crucial aspects such as operating environments, financial scores, and development plans, all of which are critical to investment attractiveness in a Covid period.
If you’re an investor, these five African countries should top the list of your favourite investment destinations.
Egypt is one of Africa’s largest economies, and it was the continent’s top foreign direct investment (FDI) destination in 2019. The government received 140 greenfield FDI projects in 2019, up 52% from the previous year and the highest level between 2003 and 2020. Egypt has attracted more than 10% of FDI into Africa since 2016, and prior to Covid-19, with investments in major industries including automotive, financial services, agricultural, and ICT.
Egypt was also one of the few countries to see GDP rise in 2020, from $303 billion in 2019 to $363 billion in 2020. According to the IMF, real GDP growth would be 3.3% in 2021 and 5.2% in 2022.
Botswana is one of the fastest-growing economies in Africa, and its economy is predicted to grow at a 9.7% annual rate in 2021. According to the government’s budget strategy document, its GDP will expand at a rate of 4.3 % in 2022. In 2018 and 2019, Botswana’s GDP surpassed $18 billion, with inflation falling slightly.
In addition, the country intends to make use of its energy resources. By 2027, it wants to be a net exporter of electricity. Botswana, Namibia, and the United States signed a memorandum of understanding in 2021 to jointly develop a giant solar project in the two southern African countries. This has the capacity to generate between 3,000 and 5,000 megawatts of electricity. Once realized, the country would become one of the world’s leading producers and exporters of solar energy.
Morocco’s GDP had been rising year after year since 2016, peaking at $119.7 billion in 2019, just before Covid-19 struck. The country has a 4.5% yearly compound growth rate.
Morocco has also recently launched the Green Generation 2020–2030 agriculture strategy. The country’s main goals are to promote and encourage young people to invest in one million hectares of arable land, which will result in the creation of 350,000 employment and a $6.6 billion increase in agricultural exports by 2030.
In 2019, FDI inflows peaked in the country, with a total of 111 FDI projects recorded, up 56% over the previous year. In 2020, the World Bank’s Ease of Doing Business ranking placed it third in Africa, with a 1.7 point rise in its score.
Ghana’s GDP has been rising since 2016 and is expected to reach $72 billion by 2020. In 2019, it was named Africa’s fastest-growing economy. Because the country is less reliant on oil than some of its peers, it has been able to weather the current downturn in oil prices.
Ghana has been diversifying its economy away from oil extraction in recent years, and its tech-focused products and services are fueling growth.
Ghana is anticipated to solidify its position as a regional IT hub with the opening of Google’s first African AI lab in 2019 and the recent announcement that Twitter will establish its African headquarters in the country. Innovation and start-ups are being emphasized in order to attract tech talent to the country.
Ghana’s IT infrastructure is still developing. MTN Group, a telecommunications operator, plans to cover 98 % of the country with 4G by the end of 2022 before launching 5G.
Tanzania’s GDP has been rising steadily since 2016, and is expected to reach $62.4 billion in 2020, an increase of around 6% over the previous five years. Following the stabilization of food prices, inflation fell to 3.3 % in 2020. Tanzania was listed among the world’s ten fastest-growing economies in the 2020 African Economic Outlook report.
Tanzania’s GDP is expected to expand by 4.9 % in 2022 and 6.3 % in 2023, according to the African Development Bank.
Tanzanians were also encouraged by the appointment of President Samia Suluhu Hassan in April 2021. Following years of feuding, Hassan travelled to Kenya for negotiations aimed at improving commercial relations between the two countries. She has also stated that she will reduce income taxes and analyze existing tax systems and charges.
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