Are you an investor or a businessman nursing the ambition to invest in Africa and you are trying to carefully consider where is the best place to do business in Africa.
Africa is an underdeveloped continent whose countries are so blessed when it comes to mineral resources, however, political instability, civil war, and general lack of trust, scare investors away.
Even though, the continent has a very huge market size that companies can profit from, the highly level of uncertainty in African countries pose a major threat to investors.
This and a host of other challenges are the reasons why wealthy investors prefer to invest in countries like Puerto Rico, Mexico, or Malaysia.
Yet, some African countries are doing well and attracting investment from investors all around the world.
In this article, we shall look at five African countries with most ease of doing business.
Five African Countries With Most Ease Of Doing Business
Egypt ranking 89 on Global Innovation Index (2022) is on the top list of best African countries to start a business.
It is one of the best places to do business in Africa is Egypt.
Investors have the opportunity to leverage the incredible pool of talent, high population, affordable cost of living, and cheap real estate in Egypt.
Economists are optimistic that Egypt will expand its economy by 5.20% in 2023.
There is also a second citizenship possibility for a Tier-C passport.
Egypt was one of the first African economies to bounce back from the major blow dealt to its economy by the Covid-19 pandemic, thanks to swift implementation of economic measures.
Egypt’s geographical proximity to the Middle East and Europe gives it a territorial advantage.
Morocco ranks 67 on the Global Innovation Index (2022)
Another place to invest in Africa is Morocco, which attracts potential investors seeking to enter new markets.
This African country enjoys a relatively stable political system that directly translates to its sturdy economy. Better, in fact, than any country in sub-Saharan Africa.
The Moroccan government enjoys closer ties with Europe but also sees the potential for diplomatic relations with other African countries.
The country has reintegrated into the African Union and is working towards membership in the Economic Community of West African States (ECOWAS).
Last year, the Moroccan economy experienced a 7% increase in GDP. The increase is attributed mainly to the agricultural sector.
However, the government expects a slowdown in the economy and forecasts a 3.2% economic growth for the next couple of years.
3. South Africa
Ranking 61 on Global Innovation Index (2022), South Africa was bumped off on the top spot for the best African countries to start a business.
South Africa, has received the lion’s share of direct investment in foreign stocks in the whole African continent because of its developed market.
Thanks predominantly to its sound economic policies, mature capital market, and availability of financing services, it has become one of the best places to invest in Africa.
Added to that are the established land infrastructure and ports that facilitate the transport of goods and services.
Businesses in South Africa are marked by a robust manufacturing industry and retail market.
Thus retail remains a great business opportunity for expansion. As a result, companies in South Africa remain optimistic despite a lower GDP forecast of 1.3 to 1.8% for the next two years.
Rwanda is positioning itself as the El Salvador of Africa with a strong thrust on good governance.
Despite its small size, Rwanda is one of the best countries to invest in Africa and is one of the fastest-growing economies on the African continent.
Rwanda has become one of the African emerging markets, making an impression on private equity firms, venture capitalists, multinational companies, institutional investors, and even local business leaders.
Though this African market has limited expansion opportunities, foreign direct investment continues to pour in because of the sound business environment.
In addition, good governance and effective economic policies all add to Rwanda’s desirability for African stocks.
Rwanda’s domestic market is also a gateway for investors looking to enter other east African markets. Trade opportunities to watch out for are in the construction and energy sectors.
This year, African Development Bank forecasts a 6.9% increase in GDP for Rwanda, following double-digit growth in the previous quarters.
Ranking 86 on the Global Innovation Index (2022), the Pula Fund helped Botswana weather the economic challenges brought by the global pandemic.
Botswana has one of the strongest economies to invest in Africa, with great potential for development.
As the least indebted country in Africa, Botswana has high foreign exchange reserves thanks to the Pula Fund.
Pula Fund is the long-term investment portfolio of Botswana from preserving part of the revenues from diamond export.
This sovereign fund helped lessen debt exposure by financing the majority of the budget deficit caused by the pandemic.
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Botswana is desirable for high-net-worth individuals looking to invest in the region because of the low level of corruption and ease of doing business. It is also a high English-speaking country.
The leading enterprises for big multinationals and investors to consider are food processing, textile, and mining.
Botswana’s economic growth forecast for the next two years is at 4 and 4.20%, respectively.