South Africa remains in fourth place in the latest Where to Invest in Africa report, released by Rand Merchant Bank (RMB). Meanwhile, Nigeria declined sharply, dropping from ninth place in the last report, to eighteenth, as two of the continent’s largest economies continue to battle policy headwinds and investor scepticism.

RMB attributed South Africa’s failure to improve its ranking, compared to last year, to sluggish growth and persistent policy uncertainty that have dampened confidence in the country’s long-term economic outlook. However, RMB said a new export-potential model identified South Africa as the continent’s largest underused trade opportunity, with up to US$75 billion in additional export capacity by 2029.

The report, which ranks 31 African economies across 20 indicators, measures resilience, market size, business climate, and growth prospects.

Seychelles, Mauritius, and Egypt claimed the top three positions, reflecting diversified economies and more predictable policy environments.

RMB’s report highlights a wider global shift from aid to investment, with foreign direct investment in Africa rebounding to about US$97 billion in 2024, up from roughly US$55 billion the previous year.

In 2024 Egypt alone drew about US$35 billion through its Ras El Hekma urban and tourism project on the Mediterranean coast, seen as a new magnet for international capital.

Nigeria’s ranking dropped amid market turbulence following sweeping currency and subsidy reforms. Meanwhile, Côte d’Ivoire and Zambia were the two biggest climbers thanks to export growth, reform momentum, and improved fiscal management. Côte d’Ivoire climbed eight spots to eighth and Zambia climbed five spots to fifteenth.

RMB concluded that Africa’s next investment wave will hinge on policy credibility, export diversification, and governments’ ability to turn reform rhetoric into real capital inflows.

The full ranking is as follows:

1. Seychelles
2. Mauritius
3. Egypt
4. South Africa
5. Morocco
6. Ghana
7. Algeria
8. Côte d’Ivoire
9. Tanzania
10. Kenya
11. Ethiopia
12. Tunisia
13. Botswana
14. Senegal
15. Zambia
16. Rwanda
17. Namibia
18. Nigeria
19. Uganda
20. Benin
21. Gabon
22. Madagascar
23. Angola
24. Democratic Republic of Congo
25. Malawi
26. Cameroon
27. Republic of Congo
28. Mozambique
29. eSwatini
30. Lesotho
31. Zimbabwe