Are you considering investment in Africa but aren’t sure of which country in Africa would yeild the highest return on Investment (ROI) for you, then this article is for you.
In this article we will look into some reasons why South Africa can be seen as the best country to invest in, in Africa in order to earn the highest return on investment (ROI)
Reasons Why South Africa is The Best African Country To Invest in.
1. South Africa Ranked 1st In investment Rating
According to the report from Africa business Insider, based on the new methodology, only the top five countries in Africa, score above 60.
South Africa and Mauritius remain the only countries to score above 70, as has been the case since 2019 with South Africa ranking first among all the nation’s in Africa.
This suggests that there is much room for improvement across the continent. Also that South Africa is a choice Investment destination.
For detailed information on the ranking visit the Africa business insider. website
https://africa.businessinsider.com/local/markets/where-to-invest-in-africa-a-ranking-of-the-top-10-countries/myfmxwq
2. South African Sectors / Industry Information
The potential of the South African economy is evident in its diversity of sectors and industries as can be seen from the Macro Economic stability information below.
3. MACRO ECONOMIC STABILITY Of SOUTH AFRICA
One of the chief reasons for South Africa becoming one of the most popular trade and investment destinations in the world is due to the country ensuring that it can meet specific trade and investment requirements of prospective investors and business people. Many lucrative possibilities, arising from South Africa’s wealth of natural resources, and almost unlimited export and import opportunities, exist in the country.
South Africa has achieved a level of macro-economic stability not seen in the country for many years. Such advances create opportunities for real increases in expenditure on social services, and reduce the costs and risks for all investors, laying the foundation for increased investment and growth. By 2007, the economy was stronger than at any time over the past 20 years.
The South African government has achieved significant successes in ensuring macro-economic stability, via the implementation of macro-economic policies directed at promoting domestic competitiveness, growth and employment. The South African economy, prior to the global economic meltdown, has been growing substantially; additional jobs have been created, and the pace of the economic expansion has been strengthened by robust investment and domestic expenditure.
4. Costs of doing Business
The cost of doing business in South Africa compares favourably to other emerging world markets.
A) According to an annual World Bank study, titled the Ease of Doing Business, South Africa ranks 32nd out of 181 of the economies surveyed in 2009 for ease of doing business.
B) The country boasts the lowest electricity prices in the world and despite looming challenges in this sector, doubling its electricity price will still place the country as the cheapest provider.
C) South Africa’s labor costs are significantly lower than those of other key emerging markets.
D) It also has a favourable corporate tax rate compared to other emerging markets.
Note however that the costs for labor, land, rental, human resources, transportation and general living expenses do, however, vary from province to province.
5. Skills In South Africa
South Africa possesses a large resource base of skilled, semi-skilled and unskilled labor. The following factors have contributed a lot to the enhanced skills position in the country:
A) Legislation: .
The South African government has introduced wide-ranging legislation to promote training and skills development and fast-track the building of world-class skills and competencies.
B) Educational Institutions:
A strong network of universities and other tertiary education institutions is home to a host of leading international academics and researchers, with the majority of research and development in South Africa, undertaken at the country’s universities.
6. South African Financial infrastructure
South Africa is one of the world’s favourite emerging markets, offering investors sophisticated financial infrastructures and exceptional investment opportunities. The South African Reserve Bank (SARB) oversees the banking services industry in South Africa. The non-banking financial services industry is governed by the Financial Service Board (FSB). South Africa has the following principal financial service markets:
1. JSE Securities Exchange South Africa (JSE);
2. South African Futures Exchange (Safex);
3. Bond Exchange of South Africa (BESA); and
4. Alternative Exchange (Altx)
The JSE is governed and licensed externally by the Stock Exchange Control Act of 1985. The Safex and BESA markets are governed by the Financial Marketers Control Act of 1989. The markets are self-regulated internally.
7. Transport and Logistics Infrastructure
South Africa boasts one of the most modern and extensive transport infrastructures in Africa. This infrastructure plays a crucial role in the country’s economy and is depended on by many neighboring states.
The government recently announced large-scale upgrading of the country’s infrastructure, as well as investment in new infrastructure. Transnet, a state-owned enterprise, is South Africa’s main transport operator and the holding company for
A) Spoornet (rail transport),
B) Autonet (road transport),
C) Petronet (liquid petroleum),
D) Portnet (port authority) and
E) Fast Forwards (container shipments).
The national airline carrier, South African Airways (SAA), is an incorporated public company owned by the South African government. The airline serves more than 700 destinations globally and carries more than 7 million passengers a year.
8. Natural Resources In South Africa
South Africa produces 14% of the world’s gold, and has 41% of the world’s known reserves. It is estimated that 21,000 tons of undeveloped resources – about one fifth of the world’s unmined gold – still remains. These ores are increasingly difficult to exploit due to the great depths at which they are situated and their fairly low-grade quality produce.
Over the past few years, South African mining houses have transformed into large, focused mining companies that include Anglo Platinum, Anglogold, De Beers, Implats and Iscor.
South Africa is the world’s largest producer of gold (after China) and platinum. The country is one of the leading producers of base metals and coal, accounting for a significant proportion of both world production and reserves. The country’s diamond industry is the third largest by value, and the sixth largest by volume in the world, with Russia and Botswana leading in both categories.
9. Food Security
The agricultural sector is well developed, and secondary manufacturing in the agro-processing industries is pervasive, evidenced by many locally produced goods.
Today, South Africa is not only self-sufficient in virtually all major agricultural products, but in a normal year, it is also a net food exporter. Major import products include wheat, rice and vegetable oils. Despite the farming industry’s declining share of GDP, it remains vital to the economy, and development and stability of the Southern African region. Over the past five years, agricultural exports have contributed on average about 8% of total South African exports.
For more details check up Department of Trade and Industry Website
In conclusion, clearly, outside the rating pointing to South Africa as the best Investment destination in Africa, strong economic indices examined in the article tend to confirm this fact. These you need consider when taking your decision as to which African country to invest in.