Although Kenya isn’t among the top in the list, the investors expressed that East Africa today represents the strongest growth potential.
A new study by Havas Horizons on the financing of African growth by 2030 has shown that the top 3 most attractive countries for international investors in 2021 are Rwanda, Nigeria, and Ethiopia.
The Havas Horizons 2021 barometer, which featured a survey of over a hundred international public and private investors, reveal that investor perception has evolved considerably in many areas, thus confirming the steady changes of a booming continent.
Compared to the 2015 and 2018 editions of this annual report, Côte d’Ivoire and Kenya are out of the top three.
The top three most attractive countries this year are Rwanda (48 percent), Nigeria (24.3 percent), and Ethiopia (21.6 percent). Worthy of note is Rwanda’s meteoric rise from the 12th position in 2015 to the 1st in this edition.
Although Kenya isn’t among the top in the list, the investors expressed that East Africa today represents the strongest growth potential. However, there are still disparities between the major regions where investors wish to increase or maintain their investments.
East Africa is considered the region with the strongest growth potential with 89.6 percent, followed by West Africa (79.2 percent), and North Africa (77.8 percent). Central Africa remains the least attractive region (58.3 percent).
The investor’s hope for Africa is as a result of them embracing the establishment of AfCFTA, a larger and more integrated African market whose trade barriers will ultimately disappear.
“AfCFTA will boost intra-African trade and should serve as a springboard for the continent’s industrialization as well as for the much-desired diversification of its economy,” said Vera Songwe, United Nations Under-Secretary-General and Executive Secretary of the Economic Commission for Africa.
Overall, the investors’ optimism on the growth of the African continent stood at 84.9 percent. However, this optimism is a slight drop from 100 percent in 2015 and 92 percent in 2018, thus transitioning from an era of afro-optimism to one of afro-realism.
The most promising sectors by 2030 have changed significantly since 2015. The favorites are henceforth infrastructure (62.6 percent), agriculture (60.6 percent), and ICTs (49 percent), reflected by the continent’s development needs in the face of demographic, food, and technological challenges.
Compared with 2015 and 2018, financial services, logistics transport, mass distribution, and energy are in decline.
The investors also identified areas of improvement if Africa has to enhance its attractiveness. These areas were identified as infrastructure quality (53.5 percent), access to education (50.7 percent), and the fight against political instability (49.3 percent). These findings are close to those recorded in previous editions.
The development of the African Continental Free Trade Area (46.5 percent) is the new main reason for investing in Africa by 2030. As in 2015 and 2018, the emergence of a middle class (43.1 percent) and the willingness to be positioned on markets of the future (33 percent) remain key elements in investor decision-making.
For nearly 89.6 percent of respondents, bad governance, political instability, and insecurity (57.5 percent) as well as the low qualification of the workforce (54.4 percent) remain obstacles to investment.
These results echo those of 2015, thus showing the recurring need to address such major issues for the future of the continent.