Ernst & Young’s 2014 Africa Attractiveness Survey; Top 15 Investment Regions In Africa
Ernst & Young released the 2014 Africa Attractiveness Survey ranking the top 15 investment regions in Africa in terms of the Foreign Direct Investments (FDI) projects. The most notable thing about the tabled survey report is Africa’s improvement in terms of perceived attractiveness in the past five years. The survey showed Africa coming in at second place and tied with Asia as the most attractive investment destinations in the world.
In the sub-Saharan Africa region, Kenya, Nigeria and South Africa are considered as the most attractive investment destinations. While, in North Africa, Morocco is the leading destination for investment, this is largely attributed to its relatively stable political environment.
The survey has also indicated a striking wide gap in the perception between investors already doing business in Africa and those who do not have businesses setup on the continent. Investors already on the ground, rank Africa by far as a more attractive investment destination in the world, whereas those who have not invested in Africa are less enthusiastic and more sceptical.
But one thing is for sure, investors’ perception of Africa as an investment destination has certainly dramatically improved, even though the actual investments in Africa have not improved as much the momentum of change in perception. This is largely because some potential foreign investors still have the notion of Africa being a high-risk investment destination. These perceptions are however deemed to be 20 to 30 years out of date.
Ernst & Young’s 2014 Africa Attractiveness Survey; Top 15 Investment Regions In Africa are as follows:
- Guateng, South Africa.
- Al-Qahirah, Egypt.
- Casablanca, Morocco.
- Nairobi, Kenya.
- Western Cape, South Africa.
- Lagos State, Nigeria.
- Luanda, Angola.
- Tunis, Tunisia.
- Greater Accra Region, Ghana.
- Tangier-Tetouan, Morocco.
- Algiers, Algeria.
- KwaZulu-Natal, South Africa.
- Dar es Salaam, Tanzania.
- Maputo, Mozambique.
- Eastern Cape, South Africa.
The full report is available here. In 2013 Africa’s FDI project reached 5.7% of the global share for FDI projects; the highest Africa has reached in the past decade. Sub-Saharan Africa had a 4.7% increase in the total number of new FDI projects, but North Africa witnessed a 3.1% decline in the total number of new FDI projects due to political instability in the region.
The average size of the FDI project grew from US$60.1m back in 2012, to US$70.1m in 2013. South Africa maintained its position as the Africa’s leading destination, while new emerging investments hotspots were Kenya, Uganda, Tanzania, Zambia, Mozambique and Ghana. The main factors behind the sub-Saharan Africa growing positive outlook are infrastructure development, rising consumer class, improving business climate, democratic dividend, abundant natural resources and strong macroeconomic growth.
Another important observation in this survey is that the number of African investors in the FDI projects tripled over the last ten years. Also, the Intra-African investment led to more job creation on the continent. The growth has been largely attributed to the strengthening of regional integration and improved regional value chains.