From Aid to Trade

“Importantly, there is good reason to believe that trade and investment are superior to development aid at generating long-term prosperity. Historical evidence suggests that no country has ever transitioned from poor to rich through foreign aid. Sustainable long-term development has consistently been driven by trade and investment in the success stories of developed economies”

This is an extract from the recently-released: “Where to Invest in Africa” report prepared by investment banking group Rand Merchant Bank (RMB) and this sentiment strikes at the heart of our mission here at the South Africa Trade Desk – we must enhance our standing in the global economy. 

Upfront, the report showcases forecasts around developmental assistance (Aid)from the members of the G7 – what is clear is that there is a clear shift away from aid and African economies will need to adapt from aid-based development to trade. 

Most attractive investment destinations in Africa – who is ripe for trade?: 

The RMB report provides its updated report for 2025, ranking the countries across 4 pillars: 

• Economic Performance and potential (35%)
• Market Accessibility and innovation (20%)
• Economic Stability and Investment Climate (25%) 
• Social and Human Development (20%) 

The rankings for 2025 are as follows: 

Cote d’Ivoire and Zambia were the two biggest winners in the 2025 report. 

Cote d’Ivoire has been boosted by a variety of factors, but most notably: 

• Universal access to electricity (94% coverage)
• A focus on agro-processing to supplement its expertise in cocoa production and cashew nuts

Zambia was supported on the mining side by an improved outlook for mining (Copper specifically) and this was reflected in an upgrade from ratings agency Moody’s.   

From aid to trade – unlocking untapped export potential

One of the most interesting sections of the report looks at the subject of “untapped export potential by country” and for South African policy-makers, this will be a particularly encouraging dataset. 

The export potential methodology is based on 3 pillars. 

• Pillar 1 is Supply –  Can the exporter produce enough and competitively?
• Pillar 2 is Demand – Is there a market for it, and will it grow?
• Pillar 3 -s Ease of trade – How easy is it to do business between these two countries?

Conclusion: South Africa is well positioned to swing from Aid to Trade 

While the African continent will take time to adjust away from historical aid relationships, this does provide an exciting opportunity for countries to chart their own unique trade paths. 

Trade and economic growth remain key to fostering long-term prosperity. While the continent has faced its challenges, it is clear that we have plenty of untapped potential. 

You can download the full RMB report here.