Morocco has overtaken South Africa to become Africa’s fourth-most attractive investment destination, reflecting the North African country’s growing manufacturing base, macroeconomic stability and success in attracting foreign investment.
The latest Where to Invest in Africa rankings by Rand Merchant Bank (RMB) place Morocco ahead of South Africa, which has held fourth position for several years.
Morocco’s automotive industry has been central to its rise, establishing the country as a major manufacturing hub serving international markets. Its industrial expansion, supported by infrastructure investment and relatively stable economic conditions, has strengthened its appeal to foreign investors.
“The country has emerged as one of Africa’s leading manufacturing hubs, particularly in automotive production, while maintaining macroeconomic stability and attracting substantial foreign direct investment,” RMB said in its report.
Manufacturing gives Morocco an advantage by attracting investment into factories, supply chains and logistics while creating opportunities for exports and skilled employment. Its proximity to European markets has also helped position it as a competitive production base for international companies.
Morocco’s manufacturing sector generated approximately $27.23 billion in value added in 2025, the latest annual figure available from the World Bank. That was up from about $24.52 billion in 2024, an increase of roughly 11%.
South Africa Loses Ground
South Africa slipped to fifth place despite retaining some of the continent’s deepest financial markets, established institutions and a sophisticated business environment.
Improvements in energy security and ongoing economic reforms continue to support its investment appeal. However, slower economic growth has weighed on its relative position as Morocco expands its industrial capacity.
The rankings do not suggest that South Africa has lost its economic advantages. Rather, they reflect the growing importance of manufacturing competitiveness, growth prospects and the ability to attract capital into productive sectors.
Nigeria and Côte d’Ivoire Make Gains
Nigeria recorded one of the biggest improvements, climbing seven places following economic reforms that included removing fuel subsidies and liberalising the foreign exchange market.
The changes have improved clarity about the country’s economic direction, although inflation, pressure on household purchasing power and high business costs remain concerns for investors.
Côte d’Ivoire also strengthened its position, rising from 16th place two years ago to seventh. Its progress reflects economic growth, infrastructure development, policy implementation and expanding hydrocarbon production.
Seychelles, Mauritius and Egypt retained the top three positions for the third consecutive year.
What the Rankings Mean for Investors
RMB assessed 31 African countries using 20 indicators across four areas including economic performance and potential, market accessibility and innovation, investment climate, and social and human development.
The findings suggest that investment attractiveness increasingly depends on a combination of industrial capacity, policy credibility, infrastructure and economic resilience rather than market size alone.
Morocco’s rise offers a lesson in the importance of building competitive industries and attracting investment into sectors that generate exports and employment.
Ultimately, the competition to attract capital is intensifying, with countries that translate reforms and industrial strategies into sustainable growth better positioned to gain investor confidence.