Morocco overtook South Africa to become the continent’s fourth-most attractive investment destination as years of industrialisation and faster growth propelled it ahead of the region’s biggest economy, FirstRand’s Rand Merchant Bank said.

The improvement in Morocco’s ranking in the latest iteration of RMB’s Where to Invest in Africa series reflects “years of successful industrialisation, export diversification and infrastructure investment,” the Johannesburg-based company said in its report released Tuesday.

“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.”

South Africa “continues to benefit from deep financial markets, improving energy security, and reform momentum, but slower growth has seen it narrowly lose ground this year,” it said.

Morocco’s rise underscores a shift in the continent’s industrial landscape as the North African nation expands manufacturing and attracts foreign capital. Its economy grew 4.9% in 2025, compared with 1.1% in South Africa, whose much larger industrial base has been constrained by years of weak growth and infrastructure bottlenecks.

Seychelles, Mauritius and Egypt retain their positions at the top of the rankings of 31 nations for the third year running, RMB said. It assesses the countries using 20 metrics grouped into four pillars that include economic performance and potential, market accessibility and innovation, the investment climate as well as social and human development.

Nigeria’s ranking improved the most, rising seven places to 11th as the removal of fuel subsidies, liberalisation of its foreign-exchange market and statistical reforms “are resetting its economy on a more sustainable course,” RMB said.

Senegal recorded the steepest decline, dropping five places to 19th as political turbulence, a fiscal-credibility crisis, sovereign-credit downgrades, and structural weaknesses have “taken a toll,” it said.