Reason #1: Africa’s rise is real,
Africa’s rise over the past decade has been very real. While skeptics still abound, and there are people who still seek to debate the point, the evidence of the continent’s clear progress over the past decade is irrefutable.
Over this period, a critical mass of African economies have grown at high and sustained rates; so much so that, 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 many parts of the region forecast to continue experiencing relatively high growth rates and a number of African economies predicted to remain among the fastest growing in the world for the foreseeable future.
Reason #2: FDI numbers do not fully reflect the broader growth story
Despite the ongoing growth and progress, greenfield FDI projects into Africa dropped year on year in 2012. Although this is obviously disappointing, it should be noted that the decline occurred in a context in which there were substantial declines in FDI projects globally. In fact, the global situation was such that Africa actually grew its overall share of FDI project flows from 5.4 to 5.6%.
Reason #3: The perception gap remains a barrier for new investors
Our 2013 Africa attractiveness survey shows some progress in terms of investor perceptions since our inaugural survey in 2011. The majority of respondents are positive about the progress made in and the outlook for Africa. Africa has also gained ground relative to other global regions: whereas, in 2011, it was only ranked ahead of two other regions, this year, it was ranked ahead of five other regions (the former Soviet states, Eastern Europe, Western Europe, the Middle East and Central America).
Reason #4: Focus on enabling those already doing business in Africa
The fact that there are a number of companies with an already-established presence in Africa that are very positive about the continent’s growth prospects and are getting down to business is crucial. These are believers in the Africa growth story, who do not need convincing they are growing their investments, creating new jobs and focusing on long-term, sustainable growth opportunities across the continent.
This article is an extract from Ernst & Young’s Attractiveness Survey Africa 2013: Getting down to Business. Click here to download the full report
Topics: Getting Started and Market Research