The Where to Invest in Africa report by RMB has knocked South Africa from its top spot as an investment destination in Africa and nominated Egypt as new the land of milk and honey.

Last year, Rand Merchant Bank (RMB) noted there was a strong possibility that Egypt would overtake South Africa in 2017, which was due to Egypt’s “superior” economic activity and a general decline across the board in South Africa.

“One of the main reasons attributed to South Africa’s shortcoming was the deteriorating political outlook, poor skills base, corruption, inflexible labour market and increasing regulation,” says Graham Bell, strategist at Old Mutual Equities.

“The list of our top 10 African countries in which to invest is quite different to those of previous years. In a nutshell, regional stalwarts have struggled to adapt to the prolonged slowdown in commodity prices and sluggish levels of production growth. Despite a slew of positive developments in the operating environments of many prominent African jurisdictions, subdued levels of economic activity have diluted several scores, resulting in interesting movements within our top 10,” states the RMB report.

Cavan Osborne, portfolio manager for Africa at Old Mutual Equities, explains that one of the biggest drivers in Egypt becoming so lucrative is its currency, which was devalued by more than 100% in late 2016.

regional stalwarts have struggled to adapt to the prolonged slowdown in commodity prices and sluggish levels of production growth.

The currency risk has reduced significantly and there may even be a possibility for currency gain, which affects the country’s inflation rates but increases its competitiveness in exports, including tourism and labour. “The money people remit to Egypt boosts the local economy. Each dollar remitted now translates into 16 or 17 local Egyptian pounds compared with a year ago when this amounted to around eight Egyptian pounds,” says Osborne.

He also says that following the tragic Arab Spring, the political climate seems to be more stable under President Abdel Fattah el-Sisi, who was the former head of the military. The RMB report found that the top three countries, Egypt, South Africa and Nigeria, still make up half of the continents $6 trillion market size. However, Egypt might pull further ahead as it’s overtaken both Nigeria and South Africa as the largest economy in Africa.

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How does South Africa climb its way to the top? RMB says it’s back to basics for the country. “Although opportunities in Africa remain abundant, the challenging business environment keeps some investors from either entering or expanding in these markets. It has now become more important than ever for African governments to make meaningful improvements to their operating environments.”

Earlier this year, economists and South Africans grew concerned when Moody’s Investors Service placed South Africa a notch above junk status. “Embodied by its rating downgrade to sub-investment grade, this reality reinforces the impact that political uncertainty has on economic activity and markets. As such, the rating pressure has made itself felt in the country’s macroeconomic outlook,” notes the report.

Of the 54 countries on the continent, only four enjoy investment-grade status: Botswana, Mauritius, Morocco and Namibia. Of these, Botswana and Mauritius are listed in the report as among the least corrupt nations in Africa. The report also draws sharp ties to corruption and economic performance.