Ernst & Young’s attractiveness survey is largely an evaluation of Africa as a destination for foreign direct investment. The survey uses the fDi Markets database for most of their FDI statistics.
Opinions on attractiveness for investment come from E&Y’s survey of senior executives from a wide range of large companies around the world—some with direct investments in Africa, and others with no African presence.
THE STATE OF FOREIGN DIRECT INVESTMENT
NUMBER OF FOREIGN DIRECT INVESTMENT PROJECTS IN AFRICA HAS
RISEN 20% A YEAR FROM 2007-2011, 27% IN 2011
INTRA AFRICAN FDI UP 42% A YEAR SINCE 2007
75% OF NEW PROJECTS FROM 2003-2011 WERE IN SERVICES OR
MANUFACTURING—ONLY 10% IN EXTRACTION
To some extent the global business community has already gotten the message. FDI in Africa is on the rise. At the same time we see investment gravitating toward certain countries. South Africa and more developed countries in North Africa such as Egypt and Morocco are attracting the largest number of projects. Investors have shown a preference for large markets such as Nigeria and those with high growth prospects like Ghana, Angola and Kenya.
It is also interesting to note that most of the projects have not been in the extractive mining and fossil fuel industries. Instead 75% or the new projects since 2003 have been in manufacturing and services, suggesting a broadening of African economies beyond the usual natural resources toward more consumer and technology based businesses.
The rise in investment in Africa by Africans shows increased confidence in the prospects of these markets Particularly as compared to other emerging markets or the slow growing developed world. In addition, the rise of a cadre of enlightened African professionals able to analyze the risks and opportunities on the continent makes South-South trade and investment more viable than it has ever been.