Casablanca – Morocco has risen to fourth place among Africa’s most attractive investment destinations, overtaking South Africa in the 2026/2027 ranking published by Rand Merchant Bank (RMB) on October 27, 2026. The improvement reflects the Kingdom’s sustained industrial development, stronger economic growth, expanding export capacity and investment in infrastructure, with the automotive sector playing a particularly important role.

The ranking places the Seychelles, Mauritius and Egypt in the first three positions for the third consecutive year. Morocco was the only country to advance within the top five, according to RMB, which assesses 31 African economies using 20 indicators covering economic performance and potential, market accessibility and innovation, the investment climate, and social and human development.

The change in position comes as Morocco continues to develop its manufacturing base and strengthen its links with international markets. While South Africa retains advantages in financial services and capital markets, Morocco has benefited from investment in export-oriented production, relatively moderate inflation and a recovery in foreign direct investment.

According to figures cited in RMB’s report, Morocco’s economy grew by 4.9% in 2025, compared with 1.1% in South Africa. Inflation in Morocco remained below 3% between 2024 and mid-2026, while South Africa recorded average inflation of approximately 5% over the five years ending in June 2026. These differences contributed to the contrasting performances of the two countries in the investment assessment.

The ranking does not measure economic size alone. Instead, it considers the conditions that can influence investors’ decisions over time, including growth prospects, access to markets, infrastructure, innovation and the broader business environment. Morocco’s improvement therefore reflects a combination of industrial expansion and macroeconomic conditions rather than a single development.

The automotive sector illustrates this transformation. Over the past two decades, Morocco has attracted major international manufacturers and developed a network of suppliers producing wiring systems, mechanical components, engines, seats and other equipment. Manufacturing facilities operated by Renault in Tangier and Casablanca, alongside Stellantis in Kenitra, have helped establish the country as an important vehicle production and export base.

In 2024, Morocco produced nearly 614,000 vehicles, surpassing South Africa’s approximately 591,000 units, according to figures attributed to Fitch Solutions. This marked a significant development for a sector that has expanded through successive investments in production facilities, industrial zones, workforce training and supplier networks.

The country’s automotive capacity is now estimated at approximately one million vehicles annually. Its manufacturing system serves both vehicle assembly and a range of component activities, allowing exports to include products with different levels of technological and industrial complexity.

Vehicle exports also underline the sector’s international orientation. Morocco shipped 454,443 vehicles abroad in 2025, compared with 414,271 for South Africa. Around 80% of Moroccan vehicle exports are destined for European markets, while locally manufactured models are sold in more than 70 countries. These include the Dacia Sandero and Logan, the Renault Kardian, the Peugeot 208, the Citroën Ami and the Opel Rocks-e.

The automotive sector’s importance extends beyond the number of vehicles assembled. In 2024, exports of vehicles and automotive components reached a record of approximately $15.7 billion, representing annual growth of 6.3%. Automotive products ranked ahead of phosphates and agricultural goods among the Kingdom’s export activities.

In 2025, automotive exports amounted to approximately $15.9 billion, accounting for 32.94% of Morocco’s total exports. Phosphates and derivatives generated approximately $10.3 billion, while agri-food exports reached around $9 billion.

The composition of automotive exports highlights the development of a broader industrial ecosystem. Complete vehicles accounted for approximately $6.3 billion in 2025, while wiring systems generated around $6 billion. Powertrain and engine components contributed approximately $2.7 billion, and interior equipment and seats represented around $1 billion.

This range of activities allows manufacturers to source a wider selection of components locally and creates opportunities for specialized suppliers. The extent to which these activities generate additional domestic value will depend on the continued development of Moroccan businesses, technical skills and locally produced inputs.

The sector also showed signs of recovery in 2026. By the end of August, automotive exports had increased by 14.5% year on year to approximately $12 billion. Vehicle construction exports rose by 19%, wiring systems by 13.9%, and automotive exterior equipment by 43.6%. These figures followed a more difficult period in 2025, when weaker global demand and technical difficulties at Stellantis affected performance.

Logistics infrastructure has been essential to the expansion of the automotive sector. Tanger Med port provides a direct connection between Moroccan factories and international markets, particularly in Europe. In 2025, its two vehicle terminals handled 327,569 Renault vehicles and 126,874 Stellantis vehicles. The port also processed more than 11 million container units, supporting a wide range of manufacturing and trading activities.

Morocco’s geographical proximity to Europe, trade agreements and industrial infrastructure have helped attract manufacturers seeking to supply international customers. These advantages have been reinforced by investment in industrial zones, transport links and training programmes designed to support production.

The next stage of development is increasingly linked to electric mobility. International investment in batteries and vehicle components, including projects involving Chinese companies, could expand Morocco’s role in emerging automotive supply chains. However, the transition will require continued investment in technology, workforce skills and supplier capabilities, as well as the ability to respond to changing demand and international competition.

Foreign direct investment has also contributed to Morocco’s improved position. Net FDI inflows reached approximately $1.7 billion in 2024 and rose to around $3.3 billion in 2025, an increase of roughly 91%, according to figures attributed to the United Nations Conference on Trade and Development. The recovery followed weaker inflows in 2023 and brought investment close to some of the highest levels recorded in the country.

The rebound indicates renewed interest in Morocco’s manufacturing facilities, property sector, infrastructure and access to export markets. Nevertheless, annual FDI flows can fluctuate depending on major projects, reinvested earnings and international financing conditions. Maintaining the recovery will require continued investment and a business environment that supports both new entrants and companies already operating in the country.

Tourism provides another source of economic activity and international revenue. Morocco welcomed 19.8 million visitors in 2025, while tourism receipts reached approximately $12.8 billion during the first 11 months of the year. Revenues increased by 19% compared with the same period a year earlier, according to the figures cited in the report.

The Kingdom aims to attract 26 million tourists annually by 2030, when it will co-host the FIFA World Cup with Spain and Portugal. Planned infrastructure investment of approximately $5 billion linked to the tournament is expected to support preparations, including improvements to transport, accommodation and facilities. The wider economic benefits will depend on the implementation of projects and their ability to improve services beyond the event itself.

Financial conditions have also influenced perceptions of Morocco’s investment environment. In September 2025, S&P Global Ratings upgraded the country’s long-term sovereign rating from BB+ to BBB- and its short-term rating from B to A-3, restoring investment-grade status with a stable outlook. The rating change can support access to international financing, although borrowing costs remain subject to market conditions and fiscal performance.

The International Monetary Fund projected that Morocco’s public debt-to-GDP ratio could decline from 67.1% in 2025 to 60.5% by 2031. The projected trajectory depends on maintaining fiscal discipline while meeting investment requirements and addressing social priorities. Public finances will remain an important consideration as the country seeks to sustain growth and finance infrastructure development.

South Africa’s lower position in the ranking reflects a different set of economic conditions. Its deep capital markets, established financial system and diversified services sector remain important advantages. Improvements in electricity supply and ongoing reforms could also support a gradual recovery. However, longstanding constraints involving energy, rail freight and port operations continue to weigh on production and trade.

Morocco’s rise should therefore be understood as a change in relative investment attractiveness, rather than a definitive comparison of the two economies’ overall strengths. South Africa retains a larger and more diversified economic base, while Morocco has recorded faster recent growth and developed a manufacturing model closely connected to international export markets.

Other African economies also experienced changes in the RMB ranking. Nigeria advanced seven places to 11th, supported by economic reforms, including the removal of fuel subsidies and foreign-exchange market liberalization. Senegal fell five places to 19th amid political uncertainty, concerns over public finances and credit rating downgrades. These movements underline the importance of policy credibility and economic stability in assessments of investment potential.

For Morocco, maintaining its fourth-place position will depend on sustaining industrial growth, attracting investment across additional sectors and increasing the contribution of domestic businesses to production. Employment creation, workforce training, productivity and regional economic disparities remain important challenges. A broader range of competitive businesses would help ensure that the benefits of investment extend beyond major manufacturing centers.

The country’s progress in the RMB ranking reflects years of investment in manufacturing, exports, tourism and infrastructure. Its future performance will depend on whether these gains can be maintained amid changing international demand, technological transitions and competition from other investment destinations. The latest assessment places Morocco among Africa’s leading choices for investment, while highlighting the importance of continued economic reform and industrial development.