2019 ended on a positive note for Africa, which remains on the list of places where investment is still profitable. At least this is what we can learn from the annual study published by the South African financial company Rand Merchant Bank on the attractiveness of investments in Africa “Where to Invest in Africa?“
The RMB has just released its 9th edition focusing on African countries where investment will become increasingly profitable by 2020. Generally speaking, the most attractive economies in the top 10 remain the same as in previous editions (2019).
We wanted to walk you through the list of the most profitable & promising African countries in 2020.
Egypt 🇪🇬
Egypt can still boast its most attractive saving up, and for the third consecutive year, according to the report’s 9th edition. The country benefits from a large demographic market and remains one of Africa’s most popular investor destinations. So, according to the authors of the report, “This is the third year in a row where Egypt is on the first position of our ranking. Egypt has made great strides in changing its business environment over the past three years, attracting more FDI (foreign direct investment) to the market and developing its own industries. “They also made the difficult decision to devalue their currency a few years ago to better reflect what is happening in the marketplace. Though these decisions have been hard to make, they will contribute to structural changes in the economy in the long run. We also forecast growth rates for the next five years of around 5.3 percent. This is well above the expected average of 4 percent for the rest of Africa, “they said.
How to invest in Egypt?
There are couple of ETFs that can help you to invest in Egypt without having to leave your sofa.
- VanEck Vectors Egypt Index ETF – 100% Egypt. This ETF is mirroring the MVIS Egypt Index
- Lyxor Pan Africa UCITS ETF – Acc – Approx 14% of Egypt exposure
- MSCI Africa Top 50 Swap UCITS ETF 1C – Approx 16% Egypt exposure. Following the MSCI Africa Top 50.
The Egyptian stock exchange also has a list of brokers and investment firms that are plugged in, into their exchange. Do you prefer to trust a mutual fund? Maybe EFG Hermes or CIBEG can help you.
Another great way for you to get portfolio exposure to Egypt is to buy ADRs. Here a list with up to date Egypt ADRs
American depositary receipts, or ADRs, are stocks that trade on U.S. exchanges but represent shares in a foreign corporation. That means they give American investors a simple way to invest in potentially international companies. This article will give you the basics of investing in ADRs without making rookie mistakes.
Source: fool.com
Morocco 🇲🇦
Following Egypt, Morocco ranks second on the list of countries where investment will deliver great returns by 2020. The Cherifian Kingdom is in full development and is expected to grow by an average of 4 per cent over the coming years. “Its reintegration into the African Union and its rapprochement with the West African Economic Community (ECOWAS) have reinforced its investment attractiveness,” the report notes.
How to invest in Morocco?
While there is no fully Morocco focussed ETF, you can still gain financial exposure to Morocco via Emerging markets & Pan African ETFs such as :
- VanEck Vectors Africa Index ETF – Approx 10% Morocco exposure
- iShares MSCI Frontier 100 ETF – Approx 5% Morocco exposure
South Africa 🇿🇦
South Africa is suffering a decline in favor of Morocco. This country is satisfied with the third position in this report, with a “cyclical slowdown,” “sluggish growth” and a “deteriorating business environment.” The country remains, however, an economy with a more liquid financial market compared to others on the continent.
“It is definitely Africa’s most liquid market. We have spoken to many international clients and the springboard for investment in Africa remains South Africa. But we need to see the implementation of structural reforms, especially in our state-owned enterprises. These changes could easily bring us back to number one in the next couple of years, “Céleste Fauconnier said.
Kenya 🇰🇪
Kenya also joins the shortlist of strong-return countries in 2020. Therefore, medium-term growth of 5 percent is expected during this year. In a calmer political context, the country benefits from “favorable weather conditions.” “This country’s economy owes its competitiveness both to diversity and to continued demand from consumers. It owes it also to urbanization, community integration (EAC), structural reforms, and infrastructure investments. This is the case for oil pipelines, railways, harbors, etc.
Rwanda 🇷🇼
Finally, Rwanda occupies 5th position on this selective list of the report. This country is boosted by a much more favorable business environment as indicated in the last Doing Business. The report further supports the development of local industries and the strong growth of FDI in the country.
Please do your own research. The information stated above according to our terms and condition is not an investment recommendation.
