Investing in Africa: Seychelles Outpaces Mauritius in RMB Report

In a notable shift in the investment landscape, the Seychelles have surpassed Mauritius as the leading destination for investment in Africa, according to the 2024 edition of the “Where to Invest in Africa” report published by Rand Merchant Bank (RMB), a prominent African investment and banking firm.

The report highlighted key factors such as personal freedom, human development, and a stable economic environment that contribute to the Seychelles’ top ranking.

Mauritius secured the second position in this comprehensive analysis of prime investment locations across the continent.

The report also identified Egypt, South Africa, and Morocco as the next most attractive investment destinations, rounding out the top five rankings.

The Seychelles’ success can be attributed to its high levels of personal freedom, human development, and an appealing investment climate.

However, questions arised regarding whether the Seychelles can emerge as a formidable competitor to Mauritius in the Indian Ocean and in Africa overall.

Economist Manisha Dookhony pointed out that the Seychelles possess many attractions, particularly in their stunning beaches, rivaling those of Mauritius.

Nonetheless, she noted that the Seychelles have a limited economic base, with a focus primarily on tourism and fishing.

Moreover, their financial sector is not as developed as that of Mauritius.

The RMB report underscored Mauritius’s strengths in innovation, economic freedom, and a high GDP per capita, making it a favored choice for investors seeking stability and growth opportunities within a well-regulated environment.

Shamima Mallam-Hassam, president of Mauritius Finance, expressed skepticism about considering the Seychelles a competitor in the financial sector, highlighting that Rwanda is emerging as a more serious contender in this area by developing essential infrastructure to attract investors.

Mallam-Hassam elaborated that the Seychelles is not perceived as a jurisdiction that will surpass Mauritius.

She noted that many companies leverage the simplicity of Seychellois structures, often for consultancy or trade, rather than utilising complex structures or funds.

Dookhony also pointed out areas for improvement in the context of business facilitation. She indicated that the Seychelles are less stringent than Mauritius, adhering to international standards concerning regulations.

This leniency has facilitated the establishment of Mauritian financial businesses in the Seychelles.

Conversely, she highlighted that bureaucracy in Mauritius can hinder investment efforts, emphasizing the challenges faced by investors, even in basic procedures such as opening a bank account.

A recent LinkedIn post from a Mauritian professional reflected this frustration, as they described opening a bank account as an increasingly daunting task and expressed hope for the emergence of online banking solutions or legal reforms to allow Global Business Companies (GBCs) and similar structures to maintain foreign bank accounts.

The RMB report was developed in collaboration with the Gordon Institute of Business Science (GIBS) and included a scorecard that evaluates 31 countries, which collectively represent 92% of the continent’s economic activity, as measured by GDP.

The report’s framework relied on 20 parameters organized into four measurement pillars: economic performance and potential; market accessibility and innovation; economic stability and investment climate; and social and human development.

Source: Defi Media