Investment in Africa

Segmenting Africa into meaningful markets

Africa is comprised of a range of distinct investment destinations. RisCura has identified these meaningful markets by analysing cultural connections, interconnectivity through trade blocs, sharing expertise, good business relations and relative ease of transportation, among others.

Africa’s segmentation

It is important to recognise that Africa is not a single investment destination with a single set of standardised risk factors and homogenous potential for reward. Segmenting Africa into meaningful markets is an important exercise. Although some high-level similarities are evident, as one digs down into the specifics of certain regions and countries, it becomes clear that Africa is comprised of a range of distinct investment destinations; each with its own attractions, flaws, cultural differences and business practices.

Investors looking at Africa for the first time may begin by identifying the largest economies by GDP or the largest cities by population. While it is certainly useful to explore country- and city-level detail, it may be more pertinent to start at a regional level by identifying groups of countries with similarities. By assessing Africa at a regional level, one can get a better understanding of the strengths and weaknesses of an investment destination by not only analysing the characteristics of the country of interest, but also the support that it receives from its regional partners. It also allows investors to identify the long-term potential of an investment by better understanding the potential growth areas into neighbouring countries. RisCura has identified these meaningful markets by analysing cultural connections, interconnectivity through trade blocs, sharing of expertise, good business relations, and relative ease of transportation, among others.

The Maghreb region, or the western portion of Northern Africa, constitutes the countries that form the Arab Maghreb Union, established in 1989 (Note: Western Sahara is excluded from all analysis). The region was established with the goal of functioning as a unified political and economic grouping. Political unrest in the region has stunted progress since its inception but hope still remains that the Union will fulfil its purpose in years to come. The region includes important cities such as Casablanca, Algiers and Tunis.

Algeria Libya Mauritania Morocco Tunisia Western Sahara

Egypt and Sudan previously united under British rule, still share strong ties, as well as one significant commonality – the trade facilitation through transport on the Nile River. As Egypt does not fall within the Arab Maghreb Union, it is separated from the rest of North Africa. However, Egypt’s strong economic and cultural ties with the Middle East bring natural trading partners, and it is often seen grouped with the Middle East for investment purposes.

Egypt Sudan

Francophone West Africa is a commonly recognised region on the continent, and typically includes Mauritania. However, RisCura has allocated Mauritania to the Maghreb region as it is found to have closer ties to the North African countries. These French-speaking countries share more than just a language. Due to their common history as French colonies, they also share similar legal and socio-political systems.

Benin Burkina Faso Cape Verde Côte d’Ivoire Guinea Mali Niger Togo Senegal São Tomé & Príncipe

Other West Africa includes Ghana, Liberia, Sierra Leone, Guinea-Bissau and The Gambia. This ‘region’ is included in the analysis where appropriate. Of course, due to the geographic placement of these countries, an analysis of intra-regional trade or transport infrastructure linking the ‘region’ would not be meaningful. Where appropriate, Ghana has been compared at a country level, rather than as a part of the ‘Other West Africa’ region. The Ghanaian economy is of a substantial size on a stand-alone basis and at times operates in isolation from its French-speaking neighbours.

The Gambia Ghana Guinea-Bissau Liberia Sierra Leone

Nigeria on its own is the size of the entire Maghreb region on an aggregated-GDP basis. While Nigeria is traditionally grouped with the rest of West Africa, its reliance on the rest of the region is less pronounced, likely as a result of its massive standalone GDP, its access to international markets via its three large ports, and its population of over 190 million people.


The countries constituting East Africa are a combination of the East African Community (Kenya, Tanzania, Uganda, Rwanda, Burundi), the LAPSSET corridor (Kenya, South Sudan and Ethiopia) as well as Djibouti, a crucial link to the Indian Ocean for Ethiopia and South Sudan. Kenya has traditionally headlined this region through consistently generating the largest GDP and acts as the primary route to international trade through the Mombasa port.*

Burundi Djibouti Ethiopia Kenya Rwanda South Sudan Tanzania Uganda

The Central Africa market is the same as that defined by the African Development Bank (AfDB) with the exception of Madagascar, which RisCura has classified as Southern Africa (ex-SA). On a GDP basis (Current, USD) and by population, the Central Africa region is on par with the Francophone West African region.

Cameroon CAR Chad DRC Republic of Congo Equatorial Guinea Gabon

Southern Africa excluding South Africa (ex-SA) incorporates those countries south of central and eastern Africa, and north of the South African border. This region offers substantial oil resources in Angola, copper in Zambia and has access to both the Atlantic and Indian oceans. The region has support from the most developed economy on the continent from the South, and access to capital coming out of South Africa as large companies look to expand into the rest of the continent.

Angola Botswana Comoros Madagascar Malawi Mauritius Mozambique Namibia Réunion Zambia Zimbabwe

South Africa, like Nigeria, is a large African economy on a standalone basis. Due to the developed nature of South Africa relative to the rest of the continent, it has not been included in the Southern African region. South Africa boasts the largest GDP per capita of all the regions (double that of Nigeria) and is the most advanced investment destination on the continent. The South African market includes Lesotho and Swaziland due to their reliance and proximity to SA. The Swazi lilangeni is pegged to the South African rand, which is also accepted as currency within the country.

Lesotho South Africa Swaziland
* Somalia and Eritrea are excluded from all analysis