Morocco is the best-ranked country while Zimbabwe is the worst in the latest Africa Risk Reward Index produced by consulting firm Control Risks and Oxford Economics.
Morocco is the best-ranked country while Zimbabwe is the worst in the latest Africa Risk Reward Index produced by consulting firm Control Risks and Oxford Economics.
The index has tracked 24 African countries since 2016, including many that attract investment from Australian mining companies.
It found that Mozambique has substantially improved in the past year while Senegal leads the countries getting worse.
Zimbabwe is ranked as the least attractive country for business, with a risk reward index of minus 5.52.
Other countries with a poor ranking included Nigeria (minus 2.23), the Democratic Republic of the Congo, Cameroon and Malawi.
The analysis found that Zimbabwe ranked poorly on economic and political risk and also offered little reward, based on factors like the growth outlook, size of the economy and demographic trends.
Nigeria and the DRC had a similar risk rating but this was partly offset by a higher reward rating.
On the positive side, Botswana, Tanzania and Cote d’Ivoire were among countries with a relatively high ranking.
South Africa was middle of the pack, with a rating of minus 0.82.
The report states that Africa's outlook is promising.
“But understanding the nuanced market dynamics and adopting a long-term perspective will be essential for stakeholders,” it said.
The report found that African political leaders are increasingly mindful of their young, growing populations.
“Recent events have shown that young people are becoming more frustrated with governance, impatient with development, and disillusioned with political establishments,” it stated.
“This discontent has manifested in some surprising election results, youth-led protests, and some policy shifts.”
In South Africa, for instance, the once-dominant African National Congress lost its parliamentary majority in the May 2024 elections.
In Senegal, the opposition candidate achieved a resounding victory, further illustrating the changing political dynamics in the region.
In Kenya, young people organised nationwide protests that led the president to dismiss the entire cabinet.
“Businesses must now operate in a less predictable security and policy environment, as governments strive to balance investment attraction with rising societal demands,” the report found.
Another trend analysed in the report is the renewed interest in infrastructure projects.
While China has historically dominated infrastructure investment on the continent, the United States, the European Union, the Gulf states and Turkiye are getting more involved.
The report does not cover Mali, where some local employees of global mining giant Barrick were arrested this week as negotiations proceed on a new mining code.
Nor does it cover Burkina Faso, which has been a popular destination for ASX-listed gold miners.
The West African country announced a new mining code this year, allowing the government to take more equity in new projects.
That followed two military coups in the country in 2022 and a hike in royalty rates on gold mining.
Despite all that, Perth-based gold miner West African Resources has continued to operate in Burkina Faso with minimal disruption to its operations and its shares are near a 10-year high.
