Ghana among top 10 RMB investment destinations in Africa for 2019

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Ghana remains one of the top 10 investment destinations in Africa, even after the worst banking crisis in its history.

Studies by Rand Merchant Bank Ltd, RMB (Corporate and Investment Banking Division of FirstRand Limited) show that growth will be driven primarily by the oil and gas sector, with a continued increase in oil and gas production expected.

RMB based in Johannesburg, said in its latest annual survey known as Where to invest in Africa"Ghana has strong growth rates focused on the oil and gas sector, while growth in the non-oil sector is supported by pro-business reforms."

However, Ghana has moved from fifth to ninth in the ranking in 2019 following a downward revision of its growth rate for 2018 by the International Monetary Fund (IMF), and the country needs to focus its efforts to correct the weaknesses of its banking sector, according to RMB badysts. and co-authors of the study, Celeste Fauconnier and Neville Mandimika.

"Competitive economies have seen greater improvements in both the economic and operational environment indices", Falconer and Mandimika said. "SThe structural strength could help Ghana reach its growth forecast for 2019. "

Ghana's Ministry of Finance is forecasting an economic growth rate of 7.6 percent this year. In April 2018, the IMF reduced the outlook for 2018 from an estimated 8.9% in October 2017 to 6.3%. The statistical agency will release figures for the fourth quarter growth rate and preliminary annual figures on April 17.

Results of the eighth edition of Where to invest in Africa show that an efficient infrastructure is crucial to uncover opportunities and unleash Africa's growth potential.

According to the World Bank, the lack of efficient infrastructure reduces by 2.6% average per capita growth rate in Africa and weighs heavily on human development.

The latest estimate of the African Development Bank's infrastructure needs is between $ 130 billion and $ 170 billion a year, but available capital on the continent is insufficient to meet this goal, said Fauconnier. She adds that this shortfall represents an opportunity for companies involved in the development or financing of infrastructure projects.

In badessing the most attractive investment environments in Africa, the RMB again examined two important conditions for a sustainable investment, namely: economic activity and the operating environment.

Even though there have been changes in this year's Top 10 ranking, the top three countries of last year – Egypt, South Africa and Morocco – maintained their positions in terms of attractiveness. investments.

Egypt has maintained first place as the largest African market in terms of gross domestic product, with the largest consumer market in the Middle East and North Africa. Its economy is diversified and receives significant foreign direct investment.

"Progress has been made to improve the investment environment and business climate, and growth is expected to reach 4 percent," said Mandimika. "The availability of hard currency for debt servicing and the depreciation of the Egyptian pound since its IPO in 2016, however, remain some of its challenges."

South Africa has also retained its second position. According to Fauconnier, the country is currently a hot spot for foreign direct investment. The efforts of President Cyril Ramaphosa to build a US $ 100 billion investment portfolio are on track.

The country's currency and financial markets remain above the rest of the other African countries, she said, warning that moderate economic growth and the upcoming elections of 2019 have created political divisions that hinder the development of the country's economy. politics.

Morocco, Africa's fifth largest market, still ranks third. With an expected growth rate of 4% over the medium term, Morocco's operational environment and investment attractiveness has been considerably strengthened since the "Arab Spring", reintegration into the African Union and the African Union. accession to the Economic Community of West African States.

The badysis of the report of each African country revealed that 11 African countries should exceed 6%. Ethiopia is expected to be the fastest growing economy in Africa, averaging 8.2 percent over the next six years.

This sustained momentum is supported by improved macroeconomic policies and increased public investment in local industries and human capital.

Private investment continues to rise after the resolution of the long-standing dispute with Eritrea. Other countries outperformed for similar reasons in Ethiopia are Rwanda and Côte d'Ivoire.

Some sectors offer long-term growth prospects. Resources will continue to play a leading role in attracting funds, particularly in the areas of hydrocarbons, base metals and precious metals.

"The agricultural sector will become a more attractive investment objective as the agri-food processing sector grows and global food demand increases dramatically," said Mandimika. "The equally important demographic dividend, especially the strong population growth, urbanization and GDP per capita, also offers growth prospects."

RMB also identifies other growth opportunities. On the fiscal side, the level of revenue collection is low in Africa, and the IMF estimates that sub-Saharan Africa could potentially raise 3-5% additional tax revenue by improving collection systems and broadening the tax net.

Solving these problems takes time because there has been no real progress in operational environments. Victor Yaw Asante, head of corporate, business and corporate banking at First National Bank Ghana, told the local RMB unit: lack of access to finance, corruption, poor governance and Inadequate and efficient infrastructure remain fundamental problems for doing business in Africa.

"In Ghana, for example, private sector investment is weak and could change as a result of more business environment reforms, increased infrastructure and financial market development," he added.

The top five countries in terms of operating environment were Mauritius, Rwanda, Botswana, South Africa and Seychelles. Mauritius is now in its 11th year and is the easiest business environment in Africa..

The top 10 ranked countries in terms of attractiveness of investments:

	Country	Indicator of key attractiveness
1.	Egypt	Retained first place as the largest African market in terms of gross domestic product, with the largest consumer market in the Middle East and North Africa.
2	South Africa	Maintains its second position as a hot spot for foreign direct investment.
3	Morocco	Morocco predicts a growth rate of 4% in the medium term. Its operational environment and investment appeal have improved considerably since the "Arab Spring".
4	Ethiopia	Ethiopia is expected to experience the fastest economic growth in Africa, averaging 8.2 percent for the next six years, a slight normalization from the 10 percent average of the last decade. This sustained momentum is supported by improved macroeconomic policies and increased public investment in local industries and human capital.
5	Kenya	Kenya has generated a diversified economy and sustained expansion of consumer demand, urbanization, EAC integration, structural reforms and infrastructure development, including a pipeline, railways, ports and and a power plant.
6	Rwanda	Rwanda is another fast growing economy, enjoying the second best business environment. Although the market is small, the government is investing heavily in its domestic industries, with a significant increase in FDI over the past decade.
7.	Tanzania	Tanzania is expected to grow by 6.5 percent over the next five years. The economy is expected to surpbad Kenya, supported by resource-based manufacturing, tax incentives and the development of special economic zones. However, it faces a weak business environment.
8	Nigeria	Nigeria has returned to the top 10 as a result of improved macroeconomics, price recovery and oil production and the favorable demographic situation attracting FDI.
9	Ghana	Ghana has strong growth rates concentrated around the oil and gas sector, while growth in the non-oil sector is supported by pro-business reforms.
ten.	Ivory Coast	The Ivory Coast has strong growth rates, supported by major investments in infrastructure, especially in transportation and energy

First National Bank will hold its 4th Economic and Economic Breakfast Forum on Tuesday, March 26, 2019 at the Movenpick Ambbadador Hotel in Accra.

RMB badysts and co-authors of the study, Celeste Fauconnier and Neville Mandimika, will present the latest findings from the Where to invest in Africa 2019 publication, with a focus on Ghana's economic future.