A train is seen at Mombasa Terminus of Mombasa-Nairobi Standard Gauge Railway, in Kenya, on June 1, 2017. Kenyan President Uhuru Kenyatta on Wednesday launched the passenger train service of the 480-km Mombasa-Nairobi Standard Gauge Railway (SGR), paving way for the nation's endeavor for industrialization and prosperity. (Xinhua/Pan Siwei)
JOHANNESBURG, Sept. 16 (Xinhua) -- A recent report released by a global risk consultancy, Control Risks, shows that Kenya and Ethiopia might soon outshine Africa's economic giants, Nigeria, South Africa and Egypt in the competition for investment.
The report Africa Risk-Reward Index, developed by Control Risks, was released in Johannesburg. The report noted that while Nigeria and South Africa have recovered, there are still some risks.
Ethiopia, which is one of the fastest growing countries in the continent, outperformed all African countries in the survey. The country attracted 3.2 billion U.S. dollars of foreign direct investment in 2016. Between 2010 and 2015, economic growth averaged 10 percent and was 6.5 percent last year.
"Experienced investors, not only in Africa but around the world, know that risk and reward are close companions," said Paul Gabriel, senior analyst for Africa at Control Risks and lead-author of the report.
Photo taken on Sept. 20, 2015 shows a train operating on the light rail in Addis Ababa, Ethiopia. Ethiopia on Sunday inaugurated a modern rail project that has been constructed by the China Railway Group (CREC) in the capital of the east African country. The electrified Addis Ababa Light Rail Transit (AA-LRT) is the first light railway on the African continent with two lines of a total length of 34 km. (Xinhua/Sun Ruibo)
"While no serious investor should overlook the economic giants of the continent, real competitive edge can only be achieved when investors manage to stay ahead of the pack in knowing what's next," said Gabriel. "The Africa Risk-Reward Index helps investors to identify some of the more hidden investment opportunities in times where the heavy-hitters are struggling."
Kenya had an average economy growth of 6 percent between 2010-2016 and is expected to be at 5.4 percent this year.
The report noted that risks have to balance opportunities. The fiscal concerns and a political system that remains closely tied to ethnic affiliation risks.
"A well-educated workforce and an innovative service sector, the government's continued investments in upgrading critical national infrastructure, and deepening integration with its neighbors through the East African Community (EAC) all allow the country to act as a gateway into the larger East Africa region," said the report.
The reported indicated that Nigeria's energy sector gives the country an appeal. The report however noted some risks of insurgent attacks on Niger Delta and fall in oil prices. The economic growth fell from 6.3 percent in 2014 to 2.7 percent in 2015. Nigeria had a 1.6 percent economic growth and is expected to be at 1.1 percent this year.
South African technicians work at the Transnet Engineering Koedoespoort Plant where Chinese locomotives are assembled, in Pretoria, South Africa, on July 27, 2017. (Xinhua/Zhai Jianlan)
"Whilst South Africa enjoys a deserved reputation as Africa's pre-eminent constitutional democracy, several of its key institutions have gradually weakened over the past decade. Economic prospects are closely linked to the outcomes of the African national Congress (ANC)'s national conference in December. The forecasted real GDP growth of 0.5 percent for 2017 is below population growth and certainly insufficient to reduce South Africa's staggering 27.7 percent unemployment rate," said the report.
The report said Egypt has stable political position but economic and security challenges remain. They noted that the government have made progress in addressing fiscal problems. Last year the country's economic growth was 4,.3 percent and is expected to grow to 3.8 percent.
