Expanding a business or allocating capital across borders comes with complex challenges. Growing in your domestic market is challenging enough. Now add a new set of market dynamics, currency risk, regulatory and legal differences, administrative distance, time zones and, for good measure, a tariff regime. And then most will agree that doing this in Africa brings even greater challenges, such as a generally less formalised institutional environment and higher political risk.
The RMB Where to Invest in Africa report tackles these challenges with a view to building understanding, deepening knowledge, finding opportunities and managing risk. My team and I at Boundless World have had the privilege of contributing to this work for the past two years. The just-published 2025/2026 edition brought its own challenges. Necessity was the mother of invention.
Same but different
The foundational model stayed the same as last year, with data for the 20 pillars updated to the latest available. Being a long-term-focused model, many rankings were unchanged, but there were notable exceptions. Nigeria stands out. The West African nation suffered a precipitous fall of nine places from ninth to 18th out of 31 countries. This posed a difficult question. Has Nigeria really gone from one of the 10 most investible countries to below average? No.
The primary cause of this decline was a major fall in the US dollar size of Nigeria’s GDP — it nearly halved. This does not mean that the country produced half of the output it did the prior year; rather, structural policy reforms sparked this change.
A revamped approach to the local currency played a big role in the lower ranking. The report explains: “The naira depreciated significantly against the USD when multiple exchange rates were collapsed into a single market-driven rate on June 23 2023. President [Bola] Tinubu called the old system of a fixed currency ‘a noose around the economic jugular of our nation’.” This reform is likely necessary medicine. It has caused short-term pain but bodes well for the future. The interventionist approach to protecting the naira’s value was unsustainable.
Nigeria stands out. The West African nation suffered a precipitous fall of nine places from ninth to 18th out of 31 countries
Export potential
The 2025/2026 report also gives attention to trade potential. The tariff turmoil thrust on the world by the Trump administration this year informed a novel expansion in the latest report: the export potential tool.
Based on current domestic supply, existing demand from trade partners and ease of trade, the report models the size of untapped export potential for all 31 African nations in the report. This is divided between US and non-US export markets.
South Africa emerges as the country with the greatest untapped potential, with nearly $68bn of exports to non-US countries foregone and more than $7bn left unexploited.
Currency, risk and planning
Currency risk is a material risk in allocating capital across African borders. This year’s report evaluates African currencies on two measures. First, how fair a currency’s current value is. Based on purchasing power, some are undervalued and some overvalued. Economic fundamentals suggest these will face the forces of mean reversion over time.
Second, currencies are evaluated for robustness. Here each nation is evaluated on 13 indicators, including international reserves, how prone a currency is to political changes and the country’s reliance on commodities. Plotting each country based on fairness of value and robustness generates a useful matrix and four currency archetypes. Positioning on this matrix helps the investor evaluate currency risk and plan for it.
So, where to invest in Africa?
The evergreen economist’s answer applies: it depends. The report doesn’t seek to solve the conundrum. However, especially in its expanded form, it gives leaders a rich body of evidence-based insights and a deep pool of information to work from. Overall country rankings are a start. Export potential and currency archetypes inject further granularity.
The utility of this tool is the capacity to slice the data strategically. Based on industry, individual business strategy and more, pillars can be upweighted or even cut from consideration. The financial services firm may entirely ignore population size and growth, relying on factors that suggest institutional robustness. By contrast, the large fast-moving consumer goods conglomerate may chase large and growing consumer bases. There are as many permutations as there are businesses with expansion ambitions.
The Centre of African Management & Markets at the Gordon Institute of Business Science conducts academic and practitioner research and provides strategic insight on African markets. Macleod is a founding member
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