Botswana was again ranked Africa’s 13th most attractive destination for investment in the latest edition of Rand Merchant Bank’s eagerly anticipated ‘Where to Invest in Africa’ survey.
The annual survey covers Africa’s 54 countries and primarily ranks them according to economic activity, looking at market size and growth, as well as the business environment. The authoritative report is a key instrument used mainly by investors looking to guide their decisions, but also by policymakers and governments to gauge themselves and their peers.
The latest survey, made available outside RMB’s client list for the first time this week, shows that while Botswana’s ranking on the overall list was unchanged from last year, the country topped the list in its attractiveness to mining investors. RMB researchers ranked Botswana the most attractive destination for mining investors in Africa, basing their findings largely on the Fraser Institute Annual Survey of Mining Companies, which Botswana regularly tops.
“Botswana ranks the highest due to political stability and security, low trade barriers and investor certainty regarding protected areas,” the RMB report notes.
“It is crucial to combine the value of the mining sector with the regulatory environment to assess which jurisdictions are the most attractive for investment.
“As an example, the DRC shows strength in its mining industry value growth, however, the country’s mining sector still battles with stringent and unpredictable regulations. “Botswana again made the top ranking for Africa (in the Fraser survey) due to its vast mineral deposits as well as an easy regulatory environment.”
Botswana also climbed up the list of countries with the best operating environment, jumping three spots in the annual RMB survey and coming third after Mauritius and Rwanda.
“The operating environment is a vital component of an investment case as it balances the quantitative macroeconomic view with the practicalities of doing business,” the RMB report reads.
“Of the top 10 operating environments, four are located in Southern Africa, once again bearing testament to the importance of well-developed infrastructure, a healthy and well-educated workforce, an efficient goods market and strong institutions.”
Botswana’s shortcomings, however, include poor work ethic in the national labour force, which was cited as the single biggest disincentive for investors. Generally, the top challenges in Africa include access to financing, corruption, tax rates, inefficient government bureaucracy and inadequate supply of infrastructure.
Overall, RMB ranked Egypt, Morocco and South Africa as Africa’s top three countries to invest in, while Burundi, Somalia and Equatorial Guinea were the bottom three respectively.