Where to invest in Africa: A ranking of the top 10 countries
Africa is a continent with a wealth of natural resources and a growing economy, making it an attractive investment destination. However, it is important to do your research before investing in any country, as there are risks involved.
The Absa Africa Financial Markets Index (AFMI) is a useful tool for assessing the investment attractiveness of African countries. It measures progress in the development of capital markets and provides individual countries with guidance on how to attract international investment.
For the second year in a row, the majority of AFMI countries have improved their scores. Zimbabwe and Rwanda saw the biggest improvements, with each country gaining almost 2 points. Zimbabwe has incorporated climate risks into financial stability regulation, while Rwanda is working with multilateral organisations to improve market standards for green investments.
However, progress has not been uniform across the index. Rising interest rates in advanced economies have led to currency depreciation and capital outflows in many African countries.
Egypt has been particularly hard hit, with its overall score falling by 3 points. It now ranks outside the top 10. Overall scores have also declined in South Africa, Nigeria, and Uganda, although they all remain in the top five, along with Mauritius and Namibia.
Based on the new methodology, only the top five countries score above 60. South Africa and Mauritius remain the only countries to score above 70, as has been the case since 2019. This suggests that there is much room for improvement across the continent.
| Rank (2023) | Country | Score 2023 | Score 2022 | Comments |
|---|---|---|---|---|
| 1 | South Africa | 88 | 89 | Lower pension assets in dollar terms weigh on score |
| 2 | Mauritius | 77 | 77 | Rise in sovereign and corporate credit ratings |
| 3 | Nigeria | 67 | 68 | Foreign exchange shortages and rising inflation reduce score |
| 4 | Uganda | 63 | 64 | Fall in FX reserves and liquidity |
| 5 | Namibia | 63 | 63 | Large pension assets but decline in fixed-income market |
| 6 | Botswana | 59 | 58 | New incentives for ESG asset issuance lift score |
| 7 | Kenya | 59 | 60 | Lower FX reserves and market liquidity |
| 8 | Morocco | 58 | 57 | New climate stress testing and higher FX liquidity |
| 9 | Ghana | 58 | 59 | Deterioration in FX reserves and price stability |
| 10 | Tanzania | 55 | 55 | Improved product diversity with sukuk bond issuance |
