Investment destinations : why Seychelles and Mauritius lead in Africa
A new report by Rand Merchant Bank (RMB) ranks the two Indian Ocean islands — Seychelles and Mauritius — as Africa’s most attractive investment destinations. For investors, these micro-economies now offer stronger guarantees in stability, innovation, and human development than larger markets such as Egypt, South Africa, or Morocco.
The Where to Invest in Africa 2025 report by RMB assesses 31 African countries, covering nearly 92% of the continent’s GDP and 75% of its population, based on 20 indicators grouped into four pillars: economic performance, accessibility and innovation, economic stability and investment climate, and human development.
Seychelles and Mauritius: Small Economies, Big Performance
Seychelles retains the top spot thanks to its “high levels of personal freedom, human development, and stable economic environment.” Mauritius ranks second for its focus on innovation, economic freedom, and one of the highest per-capita incomes in Africa. Its solid and transparent regulatory framework also enhances its appeal.
These micro-economies outperform Africa’s giants: Egypt ranks third, South Africa fourth, and Morocco fifth — despite their larger size and populations. This hierarchy reflects the growing importance of institutional quality and predictability over mere market size.
Isaah Mhlanga, Chief Economist at RMB, notes: “Over the past year, Africa’s investment landscape has been shaped by significant political and policy developments… the redirection of global capital flows is reshaping how African economies engage with the world, moving from dependence toward resilience and self-determination.”
Attractiveness Rooted in Stability and Innovation
The report highlights that investors are increasingly prioritizing ecosystem maturity, regulatory predictability, and innovation capacity. Accessibility and innovation indicators have become key drivers of attractiveness, overtaking market size alone. Some economies like Nigeria and Kenya, despite their potential, are seeing their relative attractiveness decline when reforms are delayed or currencies devalued.
However, RMB also points out that the small size of the islands is a limiting factor: domestic markets remain narrow, and the economies are vulnerable to external shocks. Mauritius and Seychelles fall into the category of “Global Connectors” — advanced yet small economies — which investors must take into account.
Africa’s competitiveness lies in institutional quality, regulatory efficiency, human capital, and innovation
The success of these island states underscores that Africa’s competitiveness depends on institutional strength, regulatory efficiency, human capital, and innovation. Morocco, ranked fifth, benefits from strong performance in connectivity, innovation, and economic stability. For other countries, the message is clear: having a large market is no longer enough — a reliable and agile ecosystem is essential.
The report concludes that “the transition underway across the continent” is driven by a profound transformation of economic structures rather than a mere race for market size. African economies must combine growth with quality to attract investors.
Mauritius and Seychelles remain safe bets for investors seeking a solid entry point into Africa
Mauritius and Seychelles remain safe bets for investors looking for a stable gateway into Africa. The RMB 2025 ranking confirms that well-regulated and stable micro-economies offer superior advantages compared to larger but risk-prone markets. For the continent, the challenge now is to build robust, innovative, and human-capital-driven ecosystems to enhance Africa’s overall investment appeal.
Read the full report: Where to Invest in Africa 2025
