Rwanda is the top African destination for global goods and services suppliers, thanks to its focus on reforming the business climate and seeking to attract foreign investment, a new report shows.

The 2014 African Retail Development Index, developed by A. T. Kearney, a global consultancy, indicates that although Rwanda is geographically small, it has a highly fragmented and increasingly more attractive market than African countries with larger economies.

Nigeria, Namibia, Tanzania and Gabon are the other nations making the top five places of the inaugural index, which is acclaimed as a useful framework for retailers because it offers them attractive destinations for their business expansion.

"With one of Africa’s fastest growing economies – annual GDP growth is more than 8 per cent, Rwanda leads the ranking. Although small in land area and just 20 years since the Genocide (against the Tutsi), Rwanda has an efficient government, strong macroeconomic indicators that reveal opportunities for international retailers can offer basic packaged goods,” the report states.

"Specifically, infrastructure reforms have focused on developing an efficient transport and road network system and turning Rwanda into a regional logistics hub. With a low income per capita, most consumers base their shopping decisions on price and affordability, and are reluctant to change brands,” it adds.

A handful of foreign groceries operate in Rwanda at the moment, the largest being Kenyan retailer Nakumatt. However, the report indicates that global retailers such as Wal-Mart and Carrefour are also eyeing the country’s market.