adminA report by Rand Merchant Bank has revealed a drop in Africa’s investment attractiveness ratings in 2014, with 22 countries receiving lower scores than last year.
Polity reports that the fourth yearly Where to Invest in Africa 2014/15 — A Guide to Corporate Investment report showed that some of the deterioration seemed temporarily owing to the political unrest in North Africa.
‘However, the outcome emphasises that the continent still has a long way to go in terms of reforms if the recent economic boom is to be sustained,’ the report said.
According to the report, the top ten most attractive investment destinations in Africa, in order of attractiveness, were SA, Nigeria, Ghana, Morocco, Tunisia, Egypt, Ethiopia, Algeria, Rwanda and Tanzania. Other notable improvements were seen in Niger, the Democratic Republic of Congo, Lesotho and Swaziland’s rankings, while the Republic of Congo, Mauritania, São Tomé and Príncipe, Egypt, and Libya fell several places lower.
The lack of complete and good-quality information about stock markets is contributing to a continued hesitancy by international public companies to list on Africa’s stock exchanges and by foreign investors to invest in domestic companies listed on African stock exchanges.
Engineering News reports that this is according to KPMG, which writes in its Listing in Africa report: ‘Perceptions by international investor communities about Africa have changed substantially from those of a decade ago.
In fact, today there is little doubt that Africa is attracting increasing interest as a potential investment destination.’
It notes that increased investment on the continent should lead to increased interest in African stock exchanges.
But what was required when listing on a stock exchange, KPMG associate director of merger and acquisition advisory services in South Africa. Robbie Cheadle said in the report, was not only substantial consideration and preparation ‘but also keen insight’ into the listing market, which was not always available.
Doing business in sub-Saharan Africa is a challenge, agrees Dr Thomas Höppli, economic research analyst for the South African Institute of Professional Accountants.
But he says in a Fin24 report that those who are undeterred by a business environment that may not be as easy as it may be in other countries could reap high rewards.
The latest research report by Höppli highlights the challenges facing investors and says ‘the main challenge in the years to come will be to turn growth into inclusive growth.’ — Polity
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