SD 18TH BEST INVESTMENT DESTINATION IN AFRICA

MBABANE - Investors betting on the economic promise of Africa should be looking to the north and south of the continent.

That is according to the 2018 Africa Investment Index (AII) compiled by Quantum Global Research Lab, the research arm of a private investment group.
On the Southern African side, Botswana, South Africa, Zambia and Swaziland are the most attractive investment destinations. Botswana, fourth on the index, is the highest ranked country in sub-Saharan Africa, and scores highly in business environment and risk factor parameters. But it’s a bit of a slump for a country that was ranked last year as the continent’s top destination on the index, and that has been emerging as a leader on the continent.

Out of the 54 countries in Africa, Swaziland is ranked number five among the Southern African Development Community (SADC) member states. On the top is Botswana, followed by South Africa, Zambia and then Swaziland. Botswana’s overall ranking is number four, South Africa is number six, Zambia eight, Tanzania is number 13 and Swaziland is number 18.

Among the Common Market for East and Southern Africa (COMESA), Swaziland is ranked number six. It is coming after Egypt, Ethiopia, Zambia, Kenya and Uganda.
However, northern Africa dominates the top of the list, with Morocco, Egypt and Algeria taking up the top three positions respectively. Morocco’s emergence as the top investment destination, one place up from last year, is attributed to its ‘receptive business environment’ and ‘low risk profile’. Egypt and Algeria score high marks for liquidity.

The index was released on March 26, 2018 on the sidelines of the Africa CEO Forum in Abidjan, Côte d’Ivoire. Mthuli Ncube, the Managing Director of the lab, said the AII is compiled by measuring six major factors—growth (Growth factors pertain GDP growth, domestic investment and size of the economy, which capture the growth opportunity and potential returns from investments),  liquidity (liquidity factors pertain to the level of domestic real interest rates and excess money supply), risk (include aspects such as the credit rating of the country, risks of currency depreciation), business environment (the doing business indicators and trade openness), demography  (pertains to the size of the population and the potential market at present and in the future) and social capital (which accounts for the level of networks, knowledge and connections in the target country.) The Facebook penetration rate is used as a proxy for this Social Capital factor).

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