According to EY’s 2016 Africa attractiveness program 2016, Staying the course, despite a relative slow down, Sub-Saharan Africa remains one of the fastest growing regions in the world. This is reflected in the foreign direct investment (FDI) levels in 2015, where FDI project numbers increased by seven percent. Although, the capital value of projects was down year-on-year — from US$88.5b in 2014 to US$71.3b in 2015 — this was still higher than the 2010–2014 average of US$68b. Similarly, jobs created were down year-on-year, but, again ahead of the average for 2010–2014.
In 2015, East Africa recorded its highest share of FDI across Africa, achieving 26.3% of total projects. Southern Africa remained the largest investment region on the continent, although projects were down 11.6% from 2014 levels. The West Africa region saw a rebound in FDI projects by 16.2%, and interestingly in 2015, the region became the leading recipient of capital investment on the continent, outpacing Southern Africa.
North Africa experienced 8.5% year-on-year growth in FDI projects. Furthermore, while projects are increasing in North Africa, they are increasing at a much faster rate in Sub-Saharan Africa.
The US retained its position in 2015, as the largest investor in the continent, with 96 investment projects valued at US$6.9b. During 2015, traditional investors such as the UK and France, as well as the UAE and India, also showed renewed interest in Africa.
Over the past decade, there has been a shift in sector focus in FDI from extractive to consumer-facing industries. Mining and metals, coal, oil and natural gas, which were previously the key sectors attracting major FDI flows, have given way to consumer products and retail (CPR), financial services and technology, media and telecommunications (TMT), accounting for 44.7% of FDI projects in 2015. In 2015, further evidence of sector diversification came through, with business services, automotive, cleantech and life sciences all rising in significance and becoming the likely “next wave” for investors.