MOST INFLUENTIAL WOMEN 2015/16

SUSTAINABILITY |

by Leigh Schaller

 

The Best African Country to Invest in

The world is increasingly fascinated with Africa as the next global growth story, but, with over a billion people living in 54 recognised states, where exactly in Africa is the best place to be if you want to make the most of the expected boom? We sent a journalist to troll through a few databases in pursuit of an (un)scientific, but hopefully interesting, answer.

 

It Starts with GDP
If you are looking for a good country to invest in, then finding a country where serious gross domestic product (GDP) growth is happening seems like a good place to start. The data from the World Bank looks at the average predicted growth rate between 2014 and 2017. Listed are all the African countries that have a growth rate higher than the global GDP growth rate for the same period.

Although most African countries are expected to grow faster than the global average, South Africa is only expected to grow by around 2.2% during this period, thus excluding it as a contender. There are a whopping 11 countries which are likely to grow by more than 6% during this period.

 

Growth in the Ivory Coast has largely been driven by foreign investment and a public-works programme. The world’s largest exporter of cocoa and cashew nuts has implemented business-friendly reforms, which led the World Bank to rank it among the 10 best performers in the world for two consecutive years.
 

Taking Advantage of GDP
Investing in a place with high expected GDP growth is one thing, but taking advantage of the GDP growth is quite another. For this reason, the World Bank’s ease-of-doing-business index is worth considering. The index ranks countries worldwide in terms of how friendly their regulations are for doing business for enterprises within the country, with 1 being the most business friendly.

 

Factors considered in determining the index include permits required for starting a business, labour market regulation, paying taxes, and how insolvency is resolved.

 

GDP


Ivory Coast
Mozambique
Congo, Dem. Rep. of

Tanzania
Ethiopia
Uganda
Rwanda
Zambia
Burkina Faso
Kenya
Niger
Nigeria
Djibouti
Mauritania
Gabon
Ghana
Gambia, The
Cameroon
Angola
Togo
Benin
Botswana
Malawi
Mali
Senegal
Lesotho
Namibia
Morocco
Mauritius
Eritrea
Egypt
Madagascar
Zimbabwe
Algeria
Comoros
Tunisia
Seychelles

 

Global GDP
 

Average (2014–2017)


8.45
7.88
7.65
7.00
6.73
6.70
6.65
6.48
6.20
6.13
6.05
5.95
5.75
5.60
5.45
5.18
5.10
5.05
4.98
4.95
4.90
4.75
4.75
4.68
4.68
4.55
4.15
4.03
3.68
3.63
3.60
3.58
3.35
3.33
3.30
3.13
3.05

 

3.03
 

The top 15 African countries on the list look like this: 

 

Ease of doing business in Africa

 

World Rating

 

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

 

Mauritius
South Africa
Rwanda
Tunisia
Ghana
Morocco
Botswana
Seychelles
Namibia
Zambia
Egypt, Arab Rep.
Cape Verde
Mozambique
Lesotho
Tanzania

 

28
43
46
60
70
71
74
85
88
111
112
122
127
128
131

 

Notable exceptions

 

16
17
22
37
43
44

 

Ethiopia
Kenya
Ivory Coast
Nigeria
Angola
Congo, Dem. Rep. of

 

132
136
147
170
181
184

 

All of the countries, except for Cape Verde and South Africa (highlighted in red), have expected GDP growth rates higher than the global average. Rwanda, Zambia, Mozambique and Tanzania (highlighted in green) are not only rated in the top 15 in terms of ease of doing business, but are also predicted to have an average growth rate of more than 6% between 2014 and 2017, making them potential frontrunners.

 

Being lowly rated on the ease-of-doing-business index should be put in perspective. China is rated 90th on the global index, while India occupies 142nd place, yet they are some of the world’s most important markets. The index simply indicates that getting return on investment is likely to be more difficult – but not impossible – in a country where doing business is more difficult.
 

But Is the Country Open to All?
Having an impressive ease-of-doing-business rating and a bumping GDP is all good and well, but if a country is not accommodating to those of us who carry an XX chromosome, then it may not be viable as an investment option for many.

 

In order to find an index that measures gender-friendliness, we turned to the Ibrahim Index of African Governance, which, according to its website, uses “over 100 variables from more than 30 independent African and global sources”. One of the components taken into account in the overall index is gender.
 

The gender index considers factors such as gender equality, gender balance in education, and legislation on violence against women and gender equality.
 

Rwanda, Mozambique and Tanzania (in green) have now featured in three indices so far, while Botswana and Mauritius (blue) have featured in two.

 

 

Seychelles
Rwanda
South Africa
Botswana
Namibia
Uganda
Senegal
Cape Verde
Mozambique
Tanzania 
Madagascar
Burundi
Lesotho
Mauritius

 

1
2
3
4
5
6
7
8
9
10
11
12
13
14

 

Gender (Ibrahim)

 

Notable exceptions

 

17
23
35
40

 

Kenya
Ethiopia
Nigeria
Angola

 

Living in Safety
Once you’ve invested in a promising country, you would like to have some sense that you and your investment are secure. Another component of the Ibrahim index considers factors such as the rule of law, accountability, personal safety, and national security when determining its rating.

 

Both Botswana and Mauritius, which rate highly on the safety index, also rate highly on the gender index and ease-of-doing-business index, although it is not expected that their GDPs will grow by more than 6%.
 

Favourites up to this point, Rwanda, Tanzania and Mozambique, didn’t make the top 15 cut in this index.

 

 

Safety and the rule of law (Ibrahim)

 

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

Botswana
Mauritius
Cape Verde
Namibia
Seychelles
Ghana
Lesotho
South Africa
São Tomé and Príncipe
Zambia
Malawi
Senegal
Swaziland
Tunisia
Morocco

 

Notable exceptions

 

17
20
28
39
44

 

Rwanda
Tanzania
Mozambique
Angola
Nigeria

 

And the Winner Is…
Spoiler alert: There is no clear winner. To choose a country based on only four measurements, where no single country rates highly on all of the indices, would amount to serious thumb-sucking, but there is a nice selection of contenders for the position.


Should your interests as an investor lie in finding the country with the highest possible growth, then Mozambique, Tanzania and Rwanda would seem like the best candidates based on these indices.If you are looking for a safer choice, albeit one with a lower growth rate, then Botswana or Mauritius may be worth investing in.

 

 

annelizew@ceomag.co.za 

 

 

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