adminAfrica Attractiveness Survey.
The continent’s global share of FDI has grown from 3,2 percent in 2007 to 5,6 percent in 2012, the survey reveals.
The report combines an analysis of international investment into Africa over the past five years with a 2013 survey of over 500 global business leaders about their views on the potential of the African market.
The latest data shows that despite a fall in project numbers from 867 in 2011 to 764 in 2012, which is in line with the global trend, project numbers are still significantly higher than anything that preceded the peak of 2008.
“A process of democratisation that has taken root across much of the continent; ongoing improvements to the business environment; exponential growth in trade and investment and substantial improvements in the quality of human life have provided a platform for the economic growth that a large number of African economies have experienced over the past decade,” said Mark Otty, Ernst & Young’s EMEIA managing partner.
Despite the impact of the ongoing global economic situation, the size of the African economy has more than tripled since 2000.
The outlook also appears positive, with the region as a whole expected to grow by 4 percent for 2013 and 4,6 percent for 2014.
A number of African economies are predicted to remain among the fastest growing in the world for the foreseeable future, according to the survey.
The survey finds that 86 percent of those with an established presence on the continent believe that Africa’s attractiveness as a place to do business will continue to improve.
Those surveyed rank Africa as the second most attractive regional investment destination in the world after Asia.
In the period since 2007, the rate of FDI projects from emerging markets into Africa has grown at a healthy compound rate of over 21 percent. In comparison investment from developed markets has grown at only 8 percent.
Intra-African investment has been particularly impressive during the same period, growing at 33 percent compound rate.
Ajen Sita, Ernst & Young’s Africa managing partner, said: “There is a growing confidence and optimism among Africans themselves about the continent’s progress and future.”
The majority of respondents are positive about the progress made and the outlook for Africa, according to the survey.
Africa has also gained ground relative to other global regions. In 2011, Africa was only ranked ahead of two other regions, while this year it ranked ahead of five other regions (the former Soviet States, Eastern Europe, Western Europe, the Middle East and Central America).
Infrastructure gaps, particularly relating to logistics and electricity, are consistently cited as the biggest challenges by those doing business in Africa.
At a macro level, too, Africa’s growth will be inherently constrained until the infrastructure deficit is bridged, said the survey.
Ernst & Young is main provider in assurance, tax, transaction and advisory services. – Xinhua.
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