Top 10 Best African Countries For Investment According To Rand Merchant Bank

Last updated on August 26th, 2022 at 02:56 pm


Nigeria’s major competitive advantage in terms of investment is its population while other parameters are not favourable to a country that prides itself as Africa’s biggest economy.

Over the years, its big economy which largely depends on oil revenue has failed to translate to an improved standard of living of its millions of people who are impoverished by the government’s harsh economic policies.

When it comes to indicators of where to do business in Africa, Nigeria is either lost on the top 10 or at a ridiculous top 20 positions.


In the latest top 10 best investment destinations in Africa released by Rand Merchant Bank (RMB), Nigeria is nowhere to be found. This aligns with factors foreign investors must consider before investing in Nigeria The 166-page research titled, “Where to Invest Africa 2021” was conducted by the South African advisory and corporate investment bank.

The ranking

In the research, Egypt is the number one best investment destination, followed by Morocco while South Africa occupies the third position.

Rwanda which has thrown the horrible experience of genocide behind continued to rank better in top investment destinations on the continent, it occupies the fourth position while Botswana is in the fifth position.

Top 10 best countries to invest in Africa
Ranking Country Score
1 Egypt 5.94
2 Morocco 5.65
3 South Africa 5.63
4 Rwanda 5.62
5 Botswana 5.60
6 Ghana 5.54
7 Mauritius 5.44
8 Cote d’Ivoire 5.40
9 Kenya 5.33
10 Tanzania 5.25
11 Algeria 5.24
12 Ethiopia 5.21
13 Senegal 5.20
14 Nigeria 5.13
15 Seychelles 5.00
16 Benin republic 4.97
17 Tunisia 4.93
18 Madagascar 4.90
19 Namibia 4.88
20 Cape Verde 4.87
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COVID-19 Exposed Many Economies

While 2020 was seen as a pandemic year that crippled economic activities across the world, it also showed how resilient a government is in terms of crisis management.

Rand Merchant Bank (RMD) says:

“A government’s ability to aid its economy in a period of deep crisis, either through direct fiscal stimulus or an ability to capitalise on its large distribution networks, has become crucial.”

It says the fiscal score is included in the research “as an additional pillar in our rankings based on available data. This indicator aims to score governments’ fiscal positions and provide a basis from which an investor can understand a specific jurisdiction.”

Significance of the RMD 2021 Ranking

The 2020 research showed that most of the Nigerian politicians like state governors and lawmakers toed the path of wickedness by hoarding covid-19 palliatives or repackaging the materials as birthday gifts or as constituency gifts.

Only two governors in Nigeria distinguish themselves from such acts: 1) Borno State governor and his counterpart in Lagos. But most of the Lagos lawmakers failed to complement the efforts of their governor or performed below expectation.

The pandemic further compounded Nigeria’s fragile economy which was hit by the pandemic due to restrictions on oil exports.

Many SMEs collapsed during the crisis, though the federal government through Central Bank of Nigeria (CBN) interventions stepped in to alleviate the effect, it was like a drop of water in the ocean.

Recalled that the 2020 World Bank Ease of Doing Business in Africa ranked Mauritius number one, followed by Rwanda, Morocco was third, Kenya and Tunisia came fourth and fifth respectively.

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Although the World Bank later disclosed that there were data irregularities, we’ve seen some slight changes in the latest research. Some countries maintained their top spot while some experienced slight changes.

Risks of doing business in Africa

Rand Merchant Bank didn’t fail to point out some of the investment challenges investors should expect in the countries, even Egypt which is ranked no. 1 has its challenges.

“The army’s control of many of the country’s economic levers erodes the perception of the business climate. Widespread poverty, which can result in social unrest, could put a dampener on the country’s economic prominence,” Where To Invest in Africa 2021 says.

For Nigeria, which is battling a foreign exchange crisis due to its reliance on importation, the report says, “The prevalence of poverty, mass unemployment, and persistent double-digit inflation should continue to fuel a tense social climate.”

Insecurity due to the activities of Boko Haram in the North, separationist group in the South-east, and attacks on some oil facilities in Niger Delta region were also noted as risks hindering investment opportunities in Nigeria.

In our October blog post, we pointed out some of the reasons investors choose Ghana over Nigeria for investments over its enabling and conducive business environment.

Nigeria’s government clampdown on Twitter also sends a negative signal to foreign investors and could affect business decisions in the years ahead. Foreign investors will always be afraid to their money in an autocratic economy where rights are violated.

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