12 Least Attractive African Economies To Invest In For 2017

By Peter Pedroncelli AFKI Original Published: June 2, 2017, 2:08 am
African economiesThese nations attracted the least foreign direct investment in Africa during 2016. Photo: symbionics.net

While Africa is a continent with great investment potential, some African economies have done little to attract international investors, or they have struggled to do so despite their efforts.

Certain economies have not experienced the positive growth that characterizes many of the nations within the African continent, and as a result they remain unattractive as investment destinations.

Quantum Global Research Lab conducted research to produce the 2017 Africa Investment Index based on a variety of factors such as macroeconomic and financial indicators and the World Bank Group’s Ease of Doing Business Indicators.

A combination of this research then determines the list of African economies that make the least compelling cases for investors.

Here are the 12 least attractive African economies to invest in for 2017.

Sources: Quantum Global, TimesLive, TheNerveAfrica, AfricanReview, CNBCAfrica.

Burundi rice farmers are among those that could be hurt by European Union farm subsidies without the United Kingdom to champion against it
Photo: Oxfam Blogs

Burundi

While Burundi has a positive reputation is a place where setting up a business is easy, the other factors work against the country as a place that attracts foreign direct investment, placing it as the 12th least attractive African economy for 2017.

Market in Nouakchott, Mauritania. Photo: en.wikipedia.org

Mauritania

While Mauritania’s media environment is a great plus for the nation, investors from across the globe considered other African nations more investment-worthy in 2016, with only 10 other African countries receiving less foreign direct investment during that year.

Antananarivo is the capital of Madagascar. Photo: findthedata.com

Madagascar

Starting off the top 10 in this not so desirable category, Madagascar continues to struggle with attracting foreign direct investment to the country. Unfortunately this year’s ranking has been their worst of the four analysed so far, as previous years saw them 39th, 43rd and 41st most attractive, compared to 45th this year.

Gambian farmer drying his maize (Photo: LinkedIn)

The Gambia

The Gambia has been steadily declining in this particular ranking over the last three years, from 32nd in 2013 to 50th in 2015, but that trend began to reverse once again in the most recent list, with the country featuring in 46th place in 2016.

Equatorial Guinea has the highest per capita income in Africa, but poor social development. Photo: Angela Stuesse

Equatorial Guinea

While countries such as Botswana, Morocco, Egypt and South Africa continue to attract a great deal of foreign direct investment, Equatorial Guinea languish on the other side of the spectrum, failing to attract a great deal of global investors to the country during 2016.

Women sell bananas in a market in Karonga, Malawi. Photo: apsnet.org

Malawi

Many African economies attract investment from foreign sources, but Malawi is another of the countries in Africa which attracted the least during 2016, due to a combination of factors that deter investors from buying into Malawi’s potential.

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Girls look at an educational poster in April 2014 distributed by UNICEF in Liberia, on preventing the spread of Ebola. Photo: UNICEF/Reuters

Liberia

The Ebola virus outbreak that hit Liberia, Sierra Leone and Guinea in recent years badly damaged its economy and stunted business in those countries, and while a great deal of aid was sent to places such as Liberia, they have not presented an attractive business case for investors in recent times.

Artisanal diamond miners at Tumbodu in Eastern Sierra Leone. Photo: Reuters/minesandcommunities.org

Sierra Leone

Sierra Leone is the fifth least attractive investment destination in Africa with regards to foreign direct investment, according to the 2016 Africa Investment Index. This year’s 50th spot on the continent is the country’s worst yet, with Sierra Leone previously placed between 39 and 45 on the list until now.

South Sudan needs to attract more foreign investment to improve the lives of their people. Image: theguardian.com

South Sudan

The newest country in Africa is still struggling to attract investment from foreign sources, with a volatile political landscape making it difficult for investors to become comfortable with putting their money in the country, which is in need of infrastructural investment.

A farmer looks after his crops in Central African Republic. Photo: CBCNews

Central African Republic

Central African Republic has consistently been the third least attractive foreign investment destination over the last four years, but this year the nation has managed to climb one place to fourth, a positive step forward.

Few investors have been interested in investing in Eritrea (Image: commons.wikimedia.org)

Eritrea

For all three previous years of the ranking, Eritrea has been the least attractive nation out of all 54 countries in Africa in terms of foreign direct investment, but this year they have managed to move off the bottom, by a single place, to be the second least attractive country for investment.

Somalia was the least attractive investment destination in Africa during 2016. Photo: Aman Sethi/TheHindu.com

Somalia

Politically Somalia is an unstable nation, and the instability and concerns over terrorism and violence is not a great environment in which private and public enterprise can thrive, therefore, Somalia was the least attractive economy for investors in 2016.

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