SA in bottom 5 of fastest growing countries in Africa

25-04-2017
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Fin24
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Cape Town - South Africa ranks a lowly 16th among the top 19 fastest growing countries in Africa, according to a new report by AfrAsia Bank and New World Wealth.

The report looked at the performance of selected African countries over the past 10 years.

Mauritius was the top performing African country during this period, with wealth growth of 230%. Ethiopia came in second with growth of 219% of the period - although from a low base.

Rwanda came in third place with growth of 107% over the period, followed by Uganda (97%), Kenya (93%), the DRC (85%), Angola (82%) and Tanzania (82%).

South Africa had growth of just 8% over this period. Nigeria had 40% growth and Namibia 21%.

The last three countries ranked all had negative growth over the period, namely Morocco (-10%), Egypt (-15%) and Algeria (-18%).

One year period

When looking at growth over the past year (2016), Mauritius is still tops with growth of 20%, followed by Kenya (10%), Ethiopia (10%), Uganda (10%), Rwanda (10%) and Ghana (8%).

South Africa ranks 11th at 5%, beaten by Namibia (6%) and Botswana (6%).

Egypt and Nigeria came in last with negative growth of -8% and -20% respectively.

According to the report Nigeria's poor performance in 2016 was due to the loss in value to the dollar of its local currency; a drop in local real estate prices in dollar terms and an outgoing migration of wealthy people.

The report estimates that over 800 millionaires left Nigeria in 2016. Most went to the UK and Europe, while some moved to South Africa.

Forecast

The report also made a forecast about total anticipated growth in 2016. Once again Mauritius came out tops with expected total growth of 130% over this period.

It is followed by Ethiopia (100%), Rwanda (100%), Tanzania (100%) and Kenya (80%).

South Africa comes in 15th place with expected total growth over this period of 30%.

Morocco, Algeria, Egypt and Nigeria came in last place with 0% growth expected over this period.

Why Mauritius did so well

According to the report Mauritius did so well, among other things, because of strong economic growth and a large number of wealthy people moving there - especially from France and from South Africa over the past decade.

The island also has a thriving and growing financial services sector, particularly in offshore banking, fund management and private banking.

Ownership rights are secure; low taxes, which encourage business formation and appeal to retirees; a low level of government regulation in the business sector; and a lack of exchange controls are other positive contributing factors.

The research also found the lifestyle (beaches, weather, golf courses and scenery) and low crime levels have a positive impact. Mauritius was recently rated by New World Wealth as the safest country in Africa, for example.