Scores are based on: market size, as measured by gross domestic product (GDP) at purchasing power parity: the market growth rate, as reflected in the International Monetary Fund’s forecasts of real GDP growth; and an operating environment index, which looks at economic freedom, corruption, efficiency and business friendliness.
The report finds Rwanda, Ghana and Zambia to be stand-out countries based on continued improvements via reforms and accelerated growth.
Of the three giants of the continent (South Africa, Egypt and Nigeria), South Africa has by far the best operating environment but the slowest growth, as is the general trend in most countries in southern Africa.
The East African Community offers four countries that collectively are large and attractive - Kenya, Tanzania, Uganda and Rwanda - while the most notable North African economies are Tunisia and Morocco.
Libya stands out from a growth perspective, representing the recovery from the civil war. Francophone West and Central Africa rate poorly although Cote d’Ivoire recently entered the growth race after political tensions eased.
Angola has a decent size economy (the third-largest in sub-Saharan Africa) and is growing rapidly, but remains a tough place to do business.
Key sectors of opportunity are also analysed in the report including finance, resources, infrastructure and consumption.
Detailed tables are provided with an extensive range of data, both for Africa and other key countries, together with snapshots of all 54 African countries.
A summary of the ranking results shows that:
•South Africa tops the rankings, as was the case last year, although the gap continues to close rapidly. It is followed by the next two largest economies on the continent, Egypt and Nigeria.
•The North African economies, which entered the rankings this year, take many of the top positions. Even with the political problems surrounding the Arab Spring and the resulting decline in their operating index, they remain relatively attractive markets.
Rwanda and Ethiopia’s rankings may come as a surprise: Rwanda is a tiny country, but its reform efforts have been so outstanding that it is reaping rapid rates of economic growth and associated improvements in the business environment.
Ethiopia’s position comes about because of rapid growth and its large population.
A few countries have worsened in the rankings: Zimbabwe stands out in this regard while Namibia, Swaziland, Benin, South Africa, Guinea, and Gabon stand out as countries where the World Bank and Transparency International report increasing bureaucracy and corruption.
Though Africa is still a desirable investment destination, the sustainability of the recent rebound in its economic growth is questionable as the growth may have more to do with the commodities super cycle than underlying structural adjustments.
Africa will need to fast-track its progress if it is going to compete with other rapidly growing emerging markets, the report said