A few weeks ago, Ernst and Young launched the maiden edition of its annual Africa Attractiveness survey. It’s a must read for anyone serious about doing business in Africa. The survey analyzes the attractiveness of Africa as an investment destination for foreign direct investors and is the result of analysis from 500 international business leaders polled from a diverse range of industries.
The consensus: The continent is becoming more attractive than ever before to international investors, and perceptions are becoming more distinctively positive as a result of the improved socio-economic growth that has pervaded the continent. They agreed that Africa is the region with the fastest economic growth rates and the highest return on investment (ROI), and as the continent continually makes improved strides in political reform, macroeconomic stability and social development, these trends are likely to improve.
It’s a good time for the continent. Foreign direct investment (FDI) flows have strongly increased in the last decade, and it’s expected to get even better. Projected capital inflows are expected to hit the $150 billion mark by 2015. Among other things, this anticipated payday is fueled primarily by ever-increasing population growth and an unprecedented explosion in the size of the middle class. According to a recent report by the African Development Bank, it is estimated that at least 310 million Africans (about 30% of the population) now fall within the middle-class bracket, which makes for an increased consumer market base demanding to be serviced with new goods, products and services. These components have opened up untold opportunities for foreign direct investors, making Africa an investment haven of sorts.
It’s a great time to invest in Africa, and while the continent might be savoring its new-found sexiness to foreign investors, there is still a lot of work to be done. Despite the growth trends, Africa still attracts less than 5% of global FDI projects. This is relatively low when looked at on a global scale. The reasons include political instability and an inadequate level of education in several countries.
More importantly, major African countries still suffer a dearth of infrastructure. Take Nigeria, for example: The country has suffered a major setback through a devastating electricity crisis it has suffered for several decades. Unfortunately, successive governments (even the current one) have displayed a lackadaisical commitment towards providing a lasting solution to the problem. Businesses cannot function effectively without electricity; hence, foreign businesses that would have otherwise thrived in the country have to look elsewhere. Similar infrastructural deficits are replicated in several countries all over the continent. Furthermore, corruption, despite experiencing a downturn, still remains a major component in doing business in several African countries.
But in spite of these little shortcomings, Africa is still the next best place to put your money. It’s about time you stepped in.
The consensus: The continent is becoming more attractive than ever before to international investors, and perceptions are becoming more distinctively positive as a result of the improved socio-economic growth that has pervaded the continent. They agreed that Africa is the region with the fastest economic growth rates and the highest return on investment (ROI), and as the continent continually makes improved strides in political reform, macroeconomic stability and social development, these trends are likely to improve.
It’s a good time for the continent. Foreign direct investment (FDI) flows have strongly increased in the last decade, and it’s expected to get even better. Projected capital inflows are expected to hit the $150 billion mark by 2015. Among other things, this anticipated payday is fueled primarily by ever-increasing population growth and an unprecedented explosion in the size of the middle class. According to a recent report by the African Development Bank, it is estimated that at least 310 million Africans (about 30% of the population) now fall within the middle-class bracket, which makes for an increased consumer market base demanding to be serviced with new goods, products and services. These components have opened up untold opportunities for foreign direct investors, making Africa an investment haven of sorts.
It’s a great time to invest in Africa, and while the continent might be savoring its new-found sexiness to foreign investors, there is still a lot of work to be done. Despite the growth trends, Africa still attracts less than 5% of global FDI projects. This is relatively low when looked at on a global scale. The reasons include political instability and an inadequate level of education in several countries.
More importantly, major African countries still suffer a dearth of infrastructure. Take Nigeria, for example: The country has suffered a major setback through a devastating electricity crisis it has suffered for several decades. Unfortunately, successive governments (even the current one) have displayed a lackadaisical commitment towards providing a lasting solution to the problem. Businesses cannot function effectively without electricity; hence, foreign businesses that would have otherwise thrived in the country have to look elsewhere. Similar infrastructural deficits are replicated in several countries all over the continent. Furthermore, corruption, despite experiencing a downturn, still remains a major component in doing business in several African countries.
But in spite of these little shortcomings, Africa is still the next best place to put your money. It’s about time you stepped in.
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