Key Highlights
- Seychelles and Mauritius rank as top destinations due to fiscal stability and post-pandemic resilience.
- Morocco and Egypt are steady performers driven by infrastructure expansion and economic reforms.
- Nigeria’s ranking drops amid reforms, while South Africa faces growth constraints despite equity market gains.
- Africa’s investment landscape is transitioning towards smaller, well-governed economies prioritizing stability and governance over size.
Introduction to Africa’s Investment Landscape for 2025/26
The African continent is experiencing a quiet yet significant transformation in its investment climate. According to the Where to Invest in Africa 2025/26 report by Rand Merchant Bank (RMB), smaller, well-governed economies are outperforming traditional heavyweights as global investors prioritize stability and governance over mere size.
Top Investment Destinations
The report identifies Seychelles and Mauritius as the continent’s leading investment destinations. Both island nations continue to demonstrate fiscal stability and post-pandemic resilience, positioning themselves as gateways for sustainable finance and blue-economy innovation.
Morocco ranks third, driven by ambitious infrastructure expansion and preparations to co-host the 2030 FIFA World Cup. The International Monetary Fund (IMF) projects a growth rate of 3.5% in 2026, supported by significant investments in transport networks, desalination plants, and renewable energy capacity.
Egypt holds fourth place thanks to reforms and renewed Gulf investment, projected to grow at 4.5% in fiscal year 2025/26 due to privatisation and exchange-rate flexibility enhancing competitiveness and investor confidence.
Challenges for Larger Economies
South Africa faces structural bottlenecks that have constrained growth. The IMF expects a modest 1.8% output increase in 2026, the slowest among major African economies. However, improved investor sentiment has boosted equity markets; the JSE All Share Index gained 14.7% in the first half of 2025, its strongest start since 2006.
Nigeria, once a top performer, dropped to 18th place due to reforms aimed at removing fuel subsidies and unifying exchange rates, which triggered inflation and currency volatility. Despite these challenges, Nigeria is expected to grow by 4.2% in 2026 as it stabilises following its exit from the FATF grey list.
Future Outlook
Africa’s shift towards a more investment-driven model marks a defining moment for the continent. With a focus on stability, governance, and reform momentum, Africa is poised to attract long-term global investors. Ghana, Côte d’Ivoire, Kenya, and other nations are also improving their economic prospects through fiscal reforms and green infrastructure investments.
RMB’s analysis underscores that while traditional heavyweights like South Africa remain important, smaller, well-governed economies offer unique opportunities for investors seeking stable growth and sustainable development. This transition highlights the continent’s resilience and policy reform momentum as key drivers of future investment success.
