Ranking: How attractive are African countries for international trade?

What are Africa’s most attractive markets for international trade? New research sheds light on the matter, with South Africa, Nigeria and Egypt coming out on top.

For nearly two decades now, Spain-headquartered Bloom Consulting has been ranking countries based on their attractiveness for trade. To measure attractiveness, the researchers assessed more than 200 countries across all corners of the globe on five dimensions: investment attractiveness, business environment, availability of talent, the relative strength of public diplomacy, and export attractiveness.

In the 2020 edition of the ranking, South Africa once again emerges as the continent’s ‘top’ trade partner, while number two Nigeria also maintaining its spot. Egypt and Morocco this year swapped positions in fourth and fifth, with Ghana in fifth place.

Globally, the United States, the United Kingdom, and China top the ranking, followed by emerging markets India and Brazil. Africa’s top two performing countries, South Africa and Nigeria, sit between rank 35 and 40 in the world ranking, just ahead of Denmark and Ukraine, among others.

Benchmarking Africa

A total of 53 African nations were evaluated in Bloom Consulting’s ranking, and similar to previous editions, the results were characterized by significant fluctuations – some countries experienced (strong) growth in their standing, while others suffered (significant) drops.

Despite seeing its investment attractiveness and foreign direct investment inflow score drop, South Africa remained Africa’s leader for the third consecutive ranking, mainly due to its strong performance in business environment dimension. In the global ranking, South Africa managed to grow by one spot.

Nigeria ranks solid on most of the factors assessed, and is from an investment perspective regarded a more attractive destination than continental leader South Africa. Its business environment and public diplomacy on the global stage however lags South Africa.

Morocco, which had maintained a firm grip on the third place for years, has now surrendered the spot to Egypt. Interestingly, the shift is not attributed to Morocco’s underperformance, as it recorded an improvement in its business environment rating, while the decrease in its investment attractiveness is negligible.

Instead, Egypt’s rise can be attributed to the country’s launch of a comprehensive economic modernization program in 2020, aimed at attracting foreign investment. This bold move has paid off, suggested the researchers, propelling the country to new heights and securing its spot in top three of the Bloom Consulting ranking.

Tanzania meanwhile has made significant strides in reducing poverty and promoting economic growth, thanks to a series of policy reforms aimed at creating an enabling environment for private sector investment. The country’s strong focus on agriculture, tourism, and natural resource exploitation has also contributed to its impressive economic performance. The country now sits in sixth spot, with Ghana at number five.

Ethiopia in fact has become the first country to jump nine spots in Bloom Consulting’s ranking in a single year, rising from number fifteen to number six today, ahead of Mozambique, Zambia, and Algeria.

Tunisia ranks as number eleven, while Kenya swapped positions with Congo to become the new number twelve. Uganda remains steadfast at fourteenth spot.

In the benchmark, Kenya performs strongly in the investment attractiveness, business environment, and online performance categories. The country’s rosy economy, burgeoning entrepreneurship ecosystem, and thriving tech sector are cited as key drivers of growth.

Rounding off the top 20 are: Sudan, Madagascar, Cameroon, Namibia, Gabon, and Botswana.

Buoyed by their rich natural resources and strong commitment to economic diversification, Gabon, Uganda, and Ivory Coast were among the fastest growers outside of the top ten. Malawi and Togo were also notable risers in the ranking.

While Africa is still behind other continents in terms of attracting foreign direct investment, many African countries have made progress through a combination of policies that have opened up their economies and boosted stability.