Construction World March 2020

MARKETPLACE

SOUTH AFRICA’S CAPITAL MARKETS STILL A CUT ABOVE THE REST South Africa’s fall to third place in RMB’s 2020 Where to Invest in Africa report reflects the country’s constrained levels of growth, but the report also highlights that it remains Africa’s bastion of a well- developed financial and capital market. The Johannesburg Stock Exchange is Africa’s most liquid stock exchange where in excess of USD1,4-billion is traded daily. This is significantly higher than the Cairo Stock Exchange (Egypt), which trades USD44-million a day, underscoring the depth of South Africa’s capital markets.

S RXWK $IULFD DOVR UDQNV KLJKO\ RQ RWKHU PHDVXUHV RI ͤQDQFLDO market depth such as private credit as a percentage of GDP, demonstrating that consumers have access to a wider range of ͤQDQFLDO LQVWUXPHQWV UHODWLYH WR RWKHU $IULFDQ FRXQWULHV Although South Africa’s Ease of Doing Business ranking has slipped in the last few years, it remains one of the Top 10 easiest operating environments in Africa. This has allowed international companies to still view South Africa as a gateway to the rest of the continent. These positives must, however, be viewed in light of the mounting risks: South Africa is struggling with uninspiring growth rates. Against a backdrop of modest demand and persistent electricity constraints, our GDP growth outlook for South Africa is forecast at 0,6% and 1% in 2020 and 2021. The recovery from previous years, while muted, is premised on a gradually improving global economic outlook and more accommodative monetary policy. RMB’s Investment Attractiveness Rankings Top 10 “After nine years of publishing, we never fail to be both pleased and surprised by the extent of improvement in countries that are not necessarily perceived as strong investment destinations,”

says co-author and Head of RMB Global Markets Research, Nema Ramkhelawan-Bhana. This year, Guinea, Mozambique and Djibouti recorded the strongest gains in the rankings, with notable advancements in their operating environments. The rankings are as instructive on the downside, identifying countries that have either stagnated or outright deteriorated in one or more aspects of our methodology. South Africa, Ethiopia and Tanzania are among the more prominent countries to have taken a tumble. A deterioration in the ease of doing business has contributed to their relative underperformance and, in addition, South Africa is enduring a cyclical downturn. 7DQ]DQLD̵V IDOO IURP JUDFH KDV UHVKXͧHG WKH WRS WHQ LQYHVWPHQW destinations, with Tunisia returning to the fold at number ten while &¶WH G̵,YRLUH DQG *KDQD HGJH HYHU FORVHU WR WKH WRS ͤYH 1RUWK $IULFD remains dominant with Morocco displacing South Africa in the rankings, rising to second place. The top 10 1.Egypt: The enormity of the market paired with a sophisticated business sector relative to other countries makes Egypt the most attractive investment destination in Africa. The improvement in Egypt’s business environment, facilitated through government

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CONSTRUCTION WORLD MARCH 2020