The accounting giant recently released its annual Africa Attractiveness survey for 2011. These are the key points from the survey, from Ernst & Young.
1 Africa is becoming increasingly attractive to international investors. Perceptions are becoming more distinctly positive over the longer-term horizon; in fact, the only emerging region that is clearly ahead of Africa in terms of investor perception is Asia.
2 Business leaders are planning new developments and expanding existing ones, demonstrating why Africa’s share of new global FDI projects has steadily improved over the past decade. Looking forward, capital investments are set to grow, reaching a forecasted US$150b in 2015.
3 Africans themselves are leading the growth in investment across the continent, and display an overwhelming optimism about the growth prospects and investment potential of the continent. This optimism and self-belief is underlined by a 21% compound growth rate in Africans investing in other African countries from 2003 to 2010 (and in a diverse range of sectors).
4 Our survey of international business leaders threw up an interesting difference between developed and emerging market investors, with emerging market investors generally more positive about Africa’s attractiveness.
5 Capital investment from emerging market investors grew particularly strongly (at 13% CAGR between 2003 and 2010), with high concentration in the extractive and manufacturing sectors.
6 While investors from developed markets are relatively more cautious about Africa, they still represent the largest proportional investment, and are investing in a diverse range of sectors beyond resources.
7 A key difference appears to be that emerging market investors regard Africa as critical to sustaining their own growth, whereas developed market investors see it as a potential future market that still needs to develop. In reality, both views represent only part of the total picture.