In this article, we will take a look at the top 15 safest African countries to do business. If you want to skip our detailed analysis, you can go directly to Top 5 Safest African Countries To Do Business.
The African region is home to some of the fastest-growing countries in the world. While the COVID-19 pandemic debilitated economic growth in the region, African economies are showing promising signs of recovery. According to a report by the African Development Bank Group, the African economy is expected to post a 4% growth in real gross domestic product (GDP) in 2023, followed by a GDP growth rate of 4.3% in 2023. Additionally, the report suggests that 18 countries in the African region are expected to exceed a 5% growth rate in GDP in 2023, followed by 22 countries in 2024. You can also check out some of the best economies in Africa.
The Business Outlook in Africa
On September 7, Reuters reported that consumer confidence in the South African market significantly rose during the third quarter. Declining inflation rates and stronger economic growth rates support this phenomenon. In July 2023, South Africa posted the lowest inflation rate in two years, contributing significantly to a rise in consumer confidence.
Rising consumer confidence in a market profoundly impacts the economic outlook of an emerging region like Africa. Such explains why huge venture capitalists are touring African countries. The Kauffman Fellows Summit is one of the world's largest venture capital gatherings. The summit was held in Kenya from September 10 to 13 for the first time in history. On September 28, The Kenyan Wall Street sharedinsights by Kauffman about the summit. According to Kauffman, Kenya's potential regarding business development is primarily why the country was chosen as an ideal location for the summit. As the report suggests, prominent hubs for startups and businesses include Ghana, Rwanda, Côte d'Ivoire, and Morocco.
Kauffman also shared that the digital economy in Africa is growing immensely, providing huge business opportunities to investors. The report suggests that the digital economy in Africa is expected to grow to $712 billion by 2050. Prominent venture capital firms like Ingressive Capital, Norrsken22, GreenHouse Capital, Africa50, and CRE attended the summit alongside investors. The goal of the summit was to bring the world closer together to unveil the business potential in the African economy by engaging with startups and local businesses.
Successful Names in The African Region
There are a range of companies driving growth in the African region. These include Shoprite Holdings Ltd (OTC:SRGHY), Absa Group Limited (OTC:AGRPY), and Sasol Limited (NYSE:SSL).
Shoprite Holdings Ltd (OTC:SRGHY) is a consumer cyclical company in South Africa. The company primarily engages in food retailing. Shoprite Holdings Ltd (OTC:SRGHY) understands the need to diversify to minimize risks and maximize profits. On September 29, the company launched a new store for its clothing brand, UNIQ. The new store is set to open in Newmarket, Alberton Gauteng. The clothing brand offers various options for all family members, maintaining high quality and affordability. This will provide the company with an opportunity to seek new markets and sell its products to the masses, spreading company risk over multiple domains. It is no surprise that the company is a prominent name in the market.
Absa Group Limited (OTC:AGRPY) is Africa's leading financial services provider. On September 29, the company reported the launch of a new system in collaboration with the Unemployment Insurance Fund (UIF). The UIF and Absa Group Limited (OTC:AGRPY) are implementing a crucial unemployment form at all Absa ATMs. This step would allow people to receive unemployment benefits directly into their bank accounts instead of queueing and going through tiresome processes. Corporate social responsibility and profit maximization must go hand in hand to become a prominent member of the business world. Absa Group Limited (OTC:AGRPY) is an example of a company pioneering in both domains.
Sasol Limited (NYSE:SSL) is an energy and chemical company based in South Africa. The company continues to develop and establish strategic partnerships with prominent companies. On September 6, Sasol Limited (NYSE:SSL) reported signing a three-year agreement with Vertree Partners Limited. This partnership will give Sasol Limited (NYSE:SSL) access to climate and quality carbon investments. The partnership will assist Sasol Limited (NYSE:SSL) in developing strategies to decarbonize. Moreover, Sasol Limited (NYSE:SSL) can invest in carbon reduction measures.
The pace countries in Africa are setting towards economic growth is worth applauding. In a few years, African countries will thrive to become one of the most attractive business hubs for investors. You can also check out some of the best African stocks to invest in. With that, let's look at the top 15 safest African countries to do business.
Top 15 Safest African Countries To Do Business
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Our Methodology
For our methodology, we applied the basic concepts of risk and reward. Theorizing the impact of risk and reward, we understand that a higher risk often yields a higher reward and vice versa. To compile our list, we sourced the country-wise reward and risk scores from the Oxford Economics Report. We created two separate lists from our source: countries with the highest reward score and countries with the lowest risk score. Of the two, we included the first 15 common names. It is to be noted that since we are studying the "safest" countries, we would want to include countries offering a higher reward for a lower risk. The list is in ascending order of the reward score, with their corresponding risk scores mentioned as a sub-metric.
It is to be noted that the value for the reward and risk score is out of 10, with 10 being the highest. For reference purposes, the Oxford Economic Report defines the reward score as an amalgamation of medium-term economic growth forecasts, economic size, economic structure, and demographics. On the other hand, the risk score is calculated by combining the individual political and economic risk variables. These variables are then combined to calculate the overall risk rating of a country.
Top 15 Safest African Countries To Do Business
15. Malawi
Reward Score 2023: 2.77
Risk Score 2023: 5.67
According to our methodology, Malawi is among the safest countries in Africa to do business. Malawi reported a reward score of 2.77 in September 2023. Prominent industries in this country include the tourism industry, the manufacturing industry, and the agro-processing industry.
Shoprite Holdings Ltd (OTC:SRGHY), Absa Group Limited (OTC:AGRPY), and Sasol Limited (NYSE:SSL) are examples of successful companies driving economic growth in the African region.
14. Namibia
Reward Score 2023: 3.03
Risk Score 2023: 4.42
Namibia is one of the safest countries in Africa to do business, with a reward score of 3.03 in September 2023. Tourism, mining, energy, farming, ICT, and healthcare are some of the prominent business opportunities in Namibia.
13. Zambia
Reward Score 2023: 3.38
Risk Score 2023: 5.73
According to our methodology, Zambia is among the safest countries in the African region to do business. The most attractive commodities to produce and sell in the country include timber, gold, fish, and coffee.
12. Tunisia
Reward Score 2023: 3.45
Risk Score 2023: 5.45
Tunisia is among the safest countries in Africa to do business, with a reward score of 3.45 as of September 2023. Tunisia is known for its agricultural industry, its telecom industry, and its renewable energy industry.
11. Angola
Reward Score 2023: 3.84
Risk Score 2023: 5.68
According to our methodology, Angola is one of the safest countries in Africa to do business. The oil sector drives most of the business in the country.
10. Mauritius
Reward Score 2023: 4
Risk Score 2023: 3.52
Mauritius is a popular tourist destination and one of the safest countries in Africa to do business. The country reported a reward score of 4 in September 2023.
9. Botswana
Reward Score 2023: 4.05
Risk Score 2023: 3.68
According to our methodology, Botswana ranks among the safest countries in Africa for business. Botswana reported a reward score of 4.05 in September 2023.
8. South Africa
Reward Score 2023: 4.49
Risk Score 2023: 5.06
South Africa is one of the economic and business hubs in the African region. South Africa reported a reward score of 4.49 in September 2023. Some of the fastest-growing industries in South Africa include banking and finance, ICT, and transport.
Some of the most notable South African stocks include Shoprite Holdings Ltd (OTC:SRGHY), Absa Group Limited (OTC:AGRPY), and Sasol Limited (NYSE:SSL).
7. Algeria
Reward Score 2023: 4.7
Risk Score 2023: 5.85
Algeria is among the safest countries to do business in Africa with a reward score of 4.7 in September 2023. Some of the most prominent sectors in the country include agriculture, healthcare, and ICT.
6. Rwanda
Reward Score 2023: 4.9
Risk Score 2023: 5.46
According to our methodology, Rwanda is among the safest countries in Africa to do business. Prominent businesses in Rwanda fall under the IT sector, agro-processing sector, tourism sector, and energy sector.
