South Africa is still the most attractive investment destination in Africa despite facing several challenges that have slowed its economy, a new Rand Merchant Bank (RMB) report showed.

The Africa’s  second largest economy after Nigeria, is faced with lethargic energy crisis due to its aging power grid, labor unrest in the mining industry which has been hurt by lower commodity prices on the international market and other contagion side-effect from an economic slowdown in china and strengthening US market.

While the country’s ranking globally has fallen to 41 from 33 last year,  it is still the most attractive market for foreign investors seeking opportunities among Africa’s 54 nations, according to the 2015-16 RMB Where to Invest in Africa report.

“South Africa comes through consistently as one of the best environments to do business in, in Africa,” Nema Ramkhelawan-Bhana, Africa analyst at Rand Merchant Bank, told Moneyweb in an interview.

Nigeria, Africa’s largest economy is however not doing well in the ranking.

The West African nation of 170 million people has slipped to the fifth position in Africa from the second position in 2014. It has been overtaken by Egypt, which is recovering from its fall during the Arab Spring, and Morocco and Ghana.

“Nigeria’s descent to number five is attributed to a combination of local deterrents and its relative economic underperformance over the last year,” BDlive quoted RMB saying in the report.

“We are encouraged by the peaceful transition of power and continue to believe in the country’s long-term economic viability based on the sheer size of its economy and the prospect of a demographic dividend.”

Nigeria, the most populous country in Africa with a population of more than 170 million people, held a peaceful presidential election in March in which the first ever opposition candidate defeated the incumbent.

Other African countries also in the top ten in the RMB ranking are Ethiopia, Tunisia, Algeria, Tanzania and Kenya.