Africa records more than doubled FDI projects of 857 in 2011, investments to hit $150b by 2015 – Ernst & Young
The number of foreign direct investment (FDI) projects in Africa in 2011 was 857, according to Ernst & Young’s (E&Y) just-released second African Attractiveness Survey.
The number, recording an increase of 153%, was more than doubled from 339 projects in 2003, according to the report which combined annual analysis of investment into Africa since 2003. It surveyed 505 global executives on their views about how and where investment will take place in the next decade.
“In the last decade Africa has seen an increase in inward investment from 339 new projects to the continent in 2003 to 857 in 2011 (an increase of 153%),” the report said.
E&Y predicts that Africa is poised to enter the premier league of investment destinations.
Intra-African investment also grew exponentially as E&Y says it increased from 27 in 2003 to 145 in 2011.
The report said “growing optimism and confidence among international and African investors has lead to significant inward investment into Africa.”
Indeed, the report indicated that 60% of respondents surveyed said perception of Africa as a business location has improved over the past three years and “three quarters say attractiveness will improve further over the next three years”.
It forecast that Africa’s GDP will grow between 4 and 5% per annum in the next decade and it sees FDI into Africa reaching $150 billion by 2015.
The continent still only attracted 5.5% of global FDI projects in 2011, it added.
India has led the way as the fourth largest FDI investor by number of projects since 2003 with annual compound growth of 46% since 2007.
China and the UAE remain prominent too, but there is high growth in investment from an increasingly diverse range of other rapid growth markets, with South Korea, Saudi Arabia and Turkey among those at the forefront.
Ajen Sita, Managing Partner: Africa at Ernst & Young said “Despite high optimism, high growth and high returns, the perception gap still exists and the African continent as a whole still attracts fewer FDI projects than India and far fewer than China.”
There is still clearly work to be done by Africans – government and private sector alike – to better articulate and “sell” the growth story and investment opportunity for foreign investors, Ajen added.
By Ekow Quandzie