East Africa's largest economies, Ethiopia and Kenya, are among Africa's top investment destinations.
In its 2018 Africa Investment Index, Quantum Global Research Lab -- Quantum Global's independent research arm -- ranked Ethiopia and Kenya at positions seven and nine, up from 21 and 15 respectively, the previous year.
Ethiopia improved largely due to the country's strong economic growth, averaging 8.4 per cent over the past three years. It was fuelled by significant investments in public infrastructure.
This year, the World Bank estimates that Ethiopia will remain one of the fastest growing economies, but will slow down to 8.2 per cent from the 8.3 per cent forecast for 2017, as the country moves to stabilise public debt, which now exceeds 50 per cent of GDP.
The index assesses a country's business environment, liquidity, risk, growth, social capital and demographic factors to "paint a picture of the investment attractiveness of countries in the medium term."
Despite its protracted 2017 election, Kenya rode on a slight improvement in the ease of doing business, its relatively large economy and strong demographic factors to make it to the top 10 list, while Uganda slipped from position 12 to 17.
"Kenya's elections are a known factor and investors have developed an inbuilt tolerance. Kenya remains a free market economy, a transit state to the wider region," said Aly Khan Satchu, CEO of Rich Management.
The top five African investment destinations were Morocco, Egypt, Algeria, Botswana and Cote D'Ivore. Together, they attracted $12.8 billion in foreign direct investment inflows in 2016.
Tanzania, the only EAC country ranked in the top 10 list in last year's results, slipped from position eight to 13 in what analysts attribute to President John Magufuli's stance on foreign mining firms.
"Big ticket investments are caught in the crosshairs and crossfire of Magufuli's bulldozer approach," said Mr Satchu.
South Sudan climbed 15 positions to 36, due to a significant improvement in economic growth prospects. It ranked among the most improved economies.
