Tanzania 7th Best Country to Invest in Africa

Africa Investment Attractiveness Index 2017

Tanzania climbed two places in the 2018 “Where to Invest in Africa” report of RMB bank, to position itself as Number 7.

RMB’s Investment Attractiveness Index provides a means by which to assess the most appealing of African investment destinations.

It is based on what the bank perceives to be the most important conditions for viable investment in Africa: economic activity, expressed as a weighted average of market size and forecasted levels of GDP growth, and the operating environment depicted as a weighted average of four international surveys that measure the ease of doing business.

The surveys used are Doing Business Index, Global Competitiveness Index, Corruption Perceptions Index, and Economic Freedom Index.

The report indicates that “though marginal, improvements for Tanzania have registered in all four aspects of our operating environment index.”

“In a bid to ease the regulatory burden, President Magufuli’s administration has introduced reforms aimed at rooting out corruption and facilitating corporate registrations and licensing. The economy continues to grow steadily at 7% — albeit slower than the government’s targeted level of 7.2% for 2017. The upshot, however, is that Tanzania’s population continues to expand at a quicker rate, capping its GDP per capita at USD 965. The government is fixated on boosting domestic productivity and actively reducing Tanzania’s import dependence to attain middle-income status, which would further enhance its investment appeal,” the report explains.

Tanzania is also among the largest destinations for Chinese investors seeking strategic investments.

Angola, Côte d’Ivoire, Ethiopia, Kenya, Nigeria, South Africa, Tanzania, and Zambia make up around 50% of Chinese investment in Africa.

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Meanwhile, the continued opening up of Tanzania’s capital market (debt and equity) has paved the way for portfolio investment, particularly EAC investors.

However, the report also indicates that there has been a slight shift away from business-friendly policies and instances in which donor pulled back because of corruption.

In addition, the new laws that have been enacted to increase the state’s share of mining profits are likely to cap future capital flows into Tanzania’s mining sector.

The 2017 ranking of the top 10 countries to invest in Africa are:

  1. Egypt
  2. South Africa
  3. Morocco
  4. Ethiopia
  5. Ghana
  6. Kenya
  7. Tanzania
  8. Rwanda
  9. Tunisia
  10. Ivory Coast