Ghana has dropped in the latest ranking of best investment destinations in Africa, the Rand Merchant Bank’s seventh edition of Where to Invest in Africa Report says. The country’s slide to fifth position from fourth last year was mostly due to perceptions of worsening corruption and weaker economic freedom. The RMB’s Investment Attractiveness Index balances economic activity against the relative ease of doing business and also illustrates how subdued levels of economic activity have diluted several scores on the index when compared to last year, resulting in some interesting movements within the Top 10. “The Index serves as an indicator of what opportunities exist on the continent. The better the ranking, the better the opportunities. The scoring is also important to look at with countries. "Some countries might have fallen from their position last year, but it could just mean that other countries performed better in the past year. It does not necessarily reflect a deterioration in the attractiveness of the economy”, RMB Africa analyst Celeste Fauconnier explained. For Ghana, as well other countries to improve on their index, “they will have to work on economic growth, which in turn will increase the size of the market. The most obvious way for these economies to do so is by diversifying their economies to attract investment into other sectors, and to multiply their forex revenue earning channels. "From the operating environment perspective, it depends which areas these government are lacking when it comes to the ease of doing business. Corruption, infrastructure, access to financing and taxes are still the top 4 major deterrents to doing business on the continent. Each of these aspects should be focused on to improve the levels of foreign investment”, Celeste Fauconnier said. Although Ghana outshines Ethiopia, in most aspects of doing business, Ghana’s operating score fell by 16 percentage points due to perceptions of worsening corruption and weaker economic freedom. Under its new political dispensation, however, economic activity is gradually picking up. Notwithstanding Ghana’s set of challenges, the country labours on as it slowly rebuilds confidence in its processes and policies under the watchful eye of the IMF, Celeste Fauconnier said. The parameters used in computing the index include Economic activity which aims to measure the economic performance of a country by assessing both size and forecasted growth rates and also the operating environment index which is arguably the most subjective. The estimate uses the same four sources as in previous years: the World Bank’s Doing Business Report, the Heritage Foundation’s Index of Economic Freedom, the World Economic Forum's (WEF) Global Competitiveness Report and Transparency International’s Corruption Perceptions Index, which are surveyed at different times of the year. Notable omissions from the Top 10 this year are Nigeria and Algeria, which have fallen from numbers six and 10 to numbers 13 and 15 respectively. Ethiopia and Rwanda, on the other hand, have climbed three and four places to fourth and eighth positions, respectively. Egypt also climbed up to 1”‹^st position, overthrowing South Africa. Where to Invest in Africa 2018 highlights those countries which have understood the need to adapt to the prolonged slowdown in commodity prices and sluggish levels of production growth – and those which haven’t. The theme for Where to Invest in Africa 2018 is “Money Talks” and this edition “follows the money” on the African continent to evaluate aspects crucial to each country’s economic performance. The report focuses on the main sources of dollar revenues in Africa which allows it to measure the most important income generators and identify investment opportunities. “Over the past three years, some African governments have had to implement deep and painful budget cuts, announce multiple currency devaluations and adopt hawkish monetary policy stances - all as a result of a significant drop in traditional revenues,” says RMB Africa analyst and co-author of Where to Invest in Africa 2018 Celeste Fauconnier. “Some countries have been more nimble and effective than others in managing shortfalls,” says Nema Ramkhelawan-Bhana, also RMB Africa analyst and an author of the report. “But major policy dilemmas have ensued, forcing governments to balance economically prudent solutions with what is politically palatable.” “The last three years have sounded an alarm, amplifying what is now a dire need for the economies of Africa to shift their focus from traditional sources of income to other viable alternatives,” says Neville Mandimika, RMB Africa analyst and contributor to Where to Invest in Africa 2018 “These years have exposed a number of African nations to severe economic stress – especially that of liquidity shortages. Unfortunately, there is no quick fix to infuse into a context as complex as this, and traditional forms of revenue will remain a reality for many years to come,” says Ronak Gopaldas, RMB Africa analyst and co-author. Where to Invest in Africa 2018 also includes 191 jurisdictions around the world, and measures Africa’s performance relative to other country groupings. The unfortunate reality is that African countries are still at the lower end of the global-performance spectrum, which continues to be dominated by the US, UK, Australia and Germany.