(Ecofin Agency) - The Economist Intelligence Unit highlights that most African countries on the list of the most attractive destinations for Chinese investment performed exceptionally well in the "market expansion" category, considering the significant size of their population.

Twelve African countries featured on the list of the 80 most attractive investment destinations for Chinese companies over the next decade. This ranking, included in a report issued earlier this month by The Economist Intelligence Unit, is based on 200 indicators across two main pillars, opportunities and risks.

The opportunities pillar groups together four categories: market expansion (nominal GDP, population size, GDP per capita, demographic growth rate, etc.); natural resources (oil and gas reserves, arable land area, mineral reserves, etc.); supply chain development (infrastructure, industrial sector contribution to GDP, electricity prices, etc.); and technology and innovation development level (research and development expenditure, patent applications, School life expectancy, etc.).

The risk pillar encompassed bilateral relations with China (history of conflicts with Beijing, Chinese language use, Belt and Road Initiative membership, etc.) and operational and financial risks for foreign investors (political stability level, security risks, sovereign risk score, etc.).

All indicators were compiled to establish a score for each category, which were then aggregated to form scores for both opportunity and risk pillars. These two scores were combined and equally weighted to generate an overall score for each investment destination.

The "China Going Global Investment Index 2023 - The Belt and Road Initiative’s second decade," report indicates that South Africa will be the most attractive African country for Chinese investors in the coming decade, ranking 13th out of the total 80. This represents a significant improvement from the 2013 edition, where this African country ranked 49th.

Egypt, ranked 17th overall, has climbed 34 positions compared to 2013 and secured a prominent position among the most attractive African countries for Chinese companies. Next are Morocco (33rd out of 80), Algeria (38th), Tanzania (42nd), Angola (53rd), Nigeria (56th), Ethiopia (58th), Zambia (63rd), the Democratic Republic of the Congo (67th), Kenya (68th), and the Republic of the Congo (76th).

The report highlights that African countries perform strongly in the "market expansion" category due to their significant population sizes. It forecasts that Africa's market potential will grow further in the late 2020s, supported by improving household incomes and the implementation of the African Continental Free Trade Area (AfCFTA).

However, no African country appears in the top 20 countries with the most developed technology and innovation sectors. Only three African nations, Egypt, South Africa, and Morocco, appear in the top 20 for the most efficient supply chains.

Regarding natural resources, while many African countries are home to abundant resources, they also face high operational and financial risks.

Worldwide, Singapore remains the most attractive country for Chinese investors, followed by Indonesia, Malaysia, Hong Kong, Thailand, Vietnam, Switzerland, the United Arab Emirates, Saudi Arabia, and Chile.

The predominance of Asian countries in the top 10 is due to cultural ties, geographical proximity to China, abundant natural resources, and well-developed logistical infrastructure.

The 12 most attractive African countries for Chinese investors in the next decade are South Africa (13th out of 80 countries), Egypt (17th), Morocco (33rd), Algeria (38th), Tanzania (42nd), Angola (53rd), Nigeria (56th), Ethiopia (58th), Zambia (63rd), Democratic Republic of the Congo (67th), Kenya (68th), and Republic of the Congo (76th).