The phrase “Africa rising” aptly captures the continent’s transformation from war-torn hellscape to bustling hub of opportunity. Opening markets coupled with political reforms, falling levels of violence and increasing foreign direct investment make Sub-Saharan Africa a hot spot for economic potential.

 

MUI PR Blog ranks the top five investment destinations south of the Sahara.

 

1. Nigeria. Nigeria has received major accolades in recent years by foreign investors, topping recent Wall Street Journal rankings for emerging markets and enjoying a favored position atop Sub-Saharan Africa’s most attractive economies.

Pros: Recent revisions to Nigeria’s economic figures place national GDP at $510 billion, catapulting Nigeria ahead of South Africa for the title of “Africa’s Largest Economy.” Nigeria’s main industries, including oil production, telecoms and a newly-booming service sector offer significant upsides for investors willing to brave the risks.

Cons: Corruption and political instability – a one-two combo of bad news that your correspondent will revert to often in these rankings – dog Nigeria, with the recent kidnappings of 200 schoolgirls by terrorist organization Boko Haram illustrating the weaknesses of President Goodluck Jonathan’s administration. Spats with Boko Haram, accompanied by human rights abuses by security forces and an alarmingly unconcerned approach to corruption in the government remain significant concerns for foreign investors.

 

2. Kenya. Kenya’s economy is the largest in East Africa, with a vibrant stock exchange and relatively consistent GDP growth.

Pros: Kenya is investing heavily in infrastructure and transportation projects, linking the bustling ports of Mombasa and Malindi with the eastern hinterlands of the continent. Increased investment from Asia in Kenya, the DRC, and surrounding countries makes it likely that Nairobi will continue to be the economic center of the region for the near future.

Cons: President Uhuru Kenyatta was indicted by the International Criminal Court for crimes against humanity perpetrated in the 2007 election violence, which set off a power struggle between Western countries keen on prosecution and African nations incensed at what they took as a violation of sovereignty. Kenyatta’s dismal saga and continued government corruption illustrate Kenya’s continuing instability.

 

3. Ghana. Ghana’s rapid rise in investment rankings is due to political reforms and opening markets, heralding the country as a surprise investment destination.

Pros: Ghana’s economic freedom has improved in recent years, with rising GDP and high growth rates to stand as testament. World Bank commendations have bolstered Ghana’s attempt to portray itself as an attractive place to do business.

Cons: Though Ghana’s political system remains an encouraging model for the rest of Sub-Saharan Africa, corruption hounds the fledgling country and makes it difficult for Ghanaians to benefit from economic gains.

 

4. Angola. Impoverished yet resource-rich Angola could be a prime investment opportunity, if corruption is curbed and Angolans begin to realize tangible gains from growth.

Pros: Angola will be the main destination for oil exploration in 2014 and 2015, and looks to maintain a steady economic growth rate of 7 percent or above.

Cons: High levels of poverty, low life expectancy and rampant corruption make Angola a very risky bet.

 

5. Rwanda. Rwanda maintains relatively high rates of economic growth, and stands to benefit from the proposed economic integration of the East African Community.

Pros: Rwanda’s political situation remains stable, which places it ahead of richer countries such as Uganda who are witnessing government crackdowns in civil liberties. The World Bank’s efforts in Rwanda have improved some key economic factors.

Cons: Paul Kagame’s recent authoritarian leanings sent the country tumbling in world freedom rankings. The stock market remains underdeveloped, cramping capital inflows.

 

What do you think of these facts? Are you considering investing in foreign economies in Africa? Let me know here or on Twitter @aa_murph