Africa’s Investment Shake-Up: Small Economies Outshine The Giants in 2025/2026 Rankings

According to Rand Merchant Bank’s Where to Invest in Africa 2025/26 report, smaller, well-governed economies like Seychelles, Mauritius, and Côte d’Ivoire now lead Africa’s investment rankings, surpassing larger economies such as Nigeria and South Africa.

Africa’s investment landscape is shifting dramatically as smaller, reform-driven economies outperform the continent’s traditional heavyweights. Investors are increasingly prioritising stability, governance, and reform momentum over market size — a trend reflected in the latest Rand Merchant Bank (RMB) Where to Invest in Africa 2025/26 Report.

According to the new rankings, Seychelles, Mauritius, and Côte d’Ivoire have emerged as Africa’s top investment destinations for 2025/2026, outpacing economic giants like South Africa, Egypt, and Nigeria.

Island Economies Take the Lead

At the top of the index, Seychelles and Mauritius maintained their leadership thanks to sound fiscal management, low corruption, and post-pandemic economic resilience.

Both nations have positioned themselves as financial gateways and innovation hubs, particularly in sustainable finance and blue-economy ventures. Mauritius continues to expand its financial services reach across East and Southern Africa, attracting investors with its stability and pro-business reforms.

North Africa’s Reform Champions

In North Africa, Morocco and Egypt remain regional standouts. Morocco’s preparations to co-host the 2030 FIFA World Cup and major investments in renewable energy, desalination, and transport infrastructure are driving optimism.

Meanwhile, Egypt ranks third, supported by currency reforms, privatisation efforts, and increased Gulf investment. The IMF projects 4.5% GDP growth for Egypt in fiscal 2025/26, signalling renewed investor confidence.

Southern Africa: Mixed Fortunes

South Africa, ranked fourth, continues to face structural bottlenecks despite its deep financial markets. While economic growth remains sluggish at a projected 1.8% in 2026, the Johannesburg Stock Exchange (JSE) has recorded its strongest first-half performance since 2006, gaining 14.7% in H1 2025.

Ghana also shows signs of recovery under IMF and World Bank programmes, with growth expected to reach 4.3% in 2026, driven by fiscal reforms and currency stabilisation.

Similarly, Côte d’Ivoire surged eight places in the rankings, buoyed by efforts to diversify exports and boost local cocoa and cashew processing. Its innovative CFA franc-denominated bond issuance underscores deepening investor trust and capital market maturity.

Nigeria’s Sharp Decline

Nigeria, once a top-ten destination, saw the steepest decline — dropping from 9th to 18th place. Currency volatility, high inflation, and the removal of fuel subsidies following the 2023 CBN reforms have shaken short-term investor confidence.

Nonetheless, the IMF forecasts 4.2% GDP growth by 2026, citing gradual stabilisation after the country’s removal from the FATF grey list and renewed international engagement.

East Africa Holds Steady

In East Africa, Kenya rounds out the top ten as the region’s economic anchor. The country’s green infrastructure investments and fiscal discipline are projected to sustain 5.1% growth in 2026, reinforcing investor confidence amid regional headwinds.

Africa’s Next Growth Frontier

The RMB report highlights a defining shift: Africa’s evolution from aid dependence to trade and investment-led growth.

Smaller, agile economies are now leading through policy consistency, governance reforms, and innovation-friendly environments. As global investors diversify, Africa’s resilience and demographic potential continue to position it as a frontier for sustainable, long-term investment.

Top 10 African Investment Destinations (2025/2026):

1. Seychelles

2. Mauritius

3. Egypt

4. South Africa

5. Morocco

6. Ghana

7. Côte d’Ivoire

8. Kenya

9. Rwanda

10. Botswana