Africa 2017 | Top 25 Companies

The increased scores of the highest-rated companies on our list show that the competition to get to the top is getting harder, with more companies showing better ratios on our four key metrics: liquidity, solvency, return on assets and profit margin. Despite modest recovery in industrial commodity prices, petrochemical and mining companies have a reduced presence in this year’s list.

There is little change from last year in the top spots of Global Finance’s 2017 list of the Best-Performing Companies in Africa. The previous year’s leader, the Egyptian company Atlas for Land Reclamation and Agriculture Processing, falls to 15th position; but the next four top companies have all climbed up one slot in the ranking: South African plastic packaging and soft-drink producer Bowler Metcalf leads, followed by Morocco’s Compagnie Miniere de Touissit, South African clothing retailer Truworths, and telecom and IT solutions provider Cognition. A newcomer, Zimbabwean crocodile rancher and meat and skin exporter Padenga Holdings, appears in fifth place.

Despite low growth in their country, South African companies continue to dominate the list, boasting 14 out of the 25 best-performing companies on the continent. Zimbabwe and Tunisia bring three companies each to the pool, Kenya and Egypt take up two places each, while Compagnie Miniere de Touissit stays the only Moroccan representative in the top 25.

The geographical balance of the list could shift in coming years, as the big African economies are stalling while growth seems to be picking up in the smaller countries. According to the IMF, the region’s three largest economies—Angola, Nigeria and South Africa—are projected to post only a modest rebound in growth following 2016’s sharp slowdown.

Although it seems to have moved back to positive growth in the second quarter of 2017, South Africa’s business confidence is at its lowest since 1985, when then-president PW Botha declared a partial state of emergency to repress the anti-apartheid movement. President Jacob Zuma’s management is not offering the country or the markets much hope, after Fitch and S&P cut South Africa’s foreign-currency debt to junk in April. Bonang Mohale, CEO of Business Leadership South Africa and a former chairman of Shell South Africa, told Bloomberg in an interview, “We are expecting further ratings-agency downgrades because all the things that they said we shouldn’t do, the president has gone on to do.”

Angola, Africa’s largest oil producer, is suffering its worst economic crisis since the end of the civil war in 2002, with rampant inflation, a devalued kwanza and a foreign currency shortage. Amid suspicions of electoral fraud, president José Eduardo dos Santos is stepping down after 38 years, but his ties with his successor and his family’s strong grip on the country’s economic institutions clearly point to continuity.

The situation is looking slightly better in Nigeria. Recovering from the worst recession in 25 years, GDP growth went back to positive in the second quarter this year, led by agriculture and oil. Nigeria seems to be curbing its inflation, and its foreign currency liquidity is improving.

The African growth champion in 2016 was Ethiopia, according to IMF data. The country’s GDP success is largely attributed to public-led spending on infrastructure. The increased public debt, which now exceeds 50%, and worsening drought conditions are the main concerns for the future, according to the World Bank.

To achieve healthy growth for African corporates, continental leaders need to further diversify away from commodities and fill the infrastructure gap without incurring excessive debt. As the experience of the last year shows, it won’t be easy.