Keypoints:
- Seychelles, Mauritius lead RMB 2025/26 rankings
- Smaller, stable markets outperform larger economies
- Côte d’Ivoire and Morocco gain from reforms
AFRICA’S investment landscape is shifting, with smaller, well-governed economies now eclipsing the continent’s traditional powerhouses. According to Rand Merchant Bank’s (RMB) Where to Invest in Africa 2025/26 report, Seychelles, Mauritius and Côte d’Ivoire have emerged as the most attractive destinations for investors, underscoring a broader pivot toward governance and reform over size.
Island nations dominate the rankings
At the top of RMB’s latest index, Seychelles and Mauritius continue to outperform much larger economies. Their resilience is rooted in sound fiscal management, low corruption and stable post-pandemic recoveries.
RMB credits their sustained leadership to strong institutions and prudent policy frameworks that set them apart from more volatile markets. Both island economies have positioned themselves as regional hubs for sustainable finance and blue-economy innovation, with Mauritius expanding its financial-services reach across East and Southern Africa.
Côte d’Ivoire powers West Africa’s rise
In West Africa, Côte d’Ivoire surged eight places in RMB’s ranking, driven by economic diversification, improved governance and a maturing capital market. The government’s push to increase domestic processing of cocoa and cashew exports has boosted industrial value addition and reduced commodity dependence.
The IMF projects 5.8 percent growth in 2026, supported by regional trade integration and industrialisation. Côte d’Ivoire’s recent CFA franc-denominated bond issuance also demonstrates growing investor confidence and deepening market sophistication.
North Africa’s reform momentum builds
North Africa remains a bright spot. Morocco continues its steady ascent, powered by preparations to co-host the 2030 FIFA World Cup and heavy investment in transport, desalination and renewable energy. The IMF expects the country to achieve 3.5 percent growth by 2026, supported by public-private partnerships and green energy expansion.
Egypt, ranked third in RMB’s index, has also benefited from sustained reforms and renewed Gulf investment. Privatisation, exchange-rate flexibility and fiscal discipline have improved competitiveness and investor confidence, with growth projected at 4.5 percent for fiscal 2025/26.
Southern Africa lags despite market gains
Further south, South Africa continues to face structural challenges that restrict growth, including power shortages and policy uncertainty. Though it ranks fourth, its output is expected to rise only 1.8 percent by 2026, according to the IMF — the slowest among Africa’s major economies.
Nevertheless, improved market sentiment has buoyed the Johannesburg Stock Exchange, where the All Share Index gained 14.7 percent in the first half of 2025 — its strongest start since 2006. RMB attributes this resilience to investor confidence in the country’s financial markets despite persistent economic headwinds.
Nigeria slips amid reform turbulence
Africa’s largest economy, Nigeria, recorded the steepest fall in this year’s ranking, dropping from ninth to eighteenth place. RMB cites the near-term impact of President Bola Tinubu’s sweeping reforms — including subsidy removal and exchange-rate unification — which have spurred inflation and currency volatility.
Still, the IMF forecasts 4.2 percent growth in 2026, as macroeconomic conditions stabilise and foreign investment recovers following Nigeria’s removal from the Financial Action Task Force grey list.
Kenya anchors East Africa’s stability
Kenya rounds out RMB’s top ten, maintaining its reputation as East Africa’s anchor economy. Fiscal tightening, expanding green infrastructure and strong digital innovation underpin projected 5.1 percent growth by 2026, enhancing investor confidence and medium-term resilience.
New rules for African investment
RMB’s Where to Invest in Africa 2025/26 index evaluates 31 African economies across 20 indicators grouped under four pillars: macroeconomic performance, market accessibility, innovation and stability, and human development.
While large markets remain relevant, RMB’s findings reveal that investors now prioritise transparency, governance and fiscal discipline over market size. Six countries moved five or more positions this year, reflecting how reforms, currency performance and data accuracy are reshaping Africa’s investment narrative.
Private capital drives the next frontier
The report concludes that Africa’s shift from aid dependency to private capital marks a defining new phase. Stronger institutions, improving governance and deeper capital markets are helping the continent transition from aid-driven to investment-led growth.
RMB’s analysts note that with demographic potential, resource diversity and policy reform momentum, Africa remains one of the world’s most promising long-term frontiers. In the years ahead, smaller, disciplined economies like Seychelles, Mauritius and Côte d’Ivoire are likely to continue setting the pace.
Read the full Where to Invest in Africa 2025/26 report by Rand Merchant Bank here.
