http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.49Change: -0.02
R/$ = 11.88Change: 0.20
Au 1214.08 $/ozChange: 19.92
Pt 1149.50 $/ozChange: 15.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
May 03, 2012

FDI into Africa seen growing as investor confidence improves

Back
Africa|Building|Environment|Ernst & Young|Projects|Africa|Asia|Brazil|China|France|India|Kenya|Nigeria|Russia|South Africa|United Arab Emirates|United Kingdom|United States|USD|Building Bridges|Gross Domestic Product|Services|Solutions|Ajen Sita|Infrastructure
Africa|Building|Environment|Projects|Africa||Kenya||||Services|Solutions|Infrastructure
africa-company|building|environment|ernst-young|projects|africa|asia|brazil|china|france|india|kenya|nigeria|russia|south-africa|united-arab-emirates|united-kingdom|united-states|usd|building-bridges|gross-domestic-product|services|solutions|ajen-sita|infrastructure
© Reuse this



The perception of Africa as an attractive investment destination was expected to improve over the next three years, a survey by advisory services company Ernst & Young (E&Y) has found.

In its ‘Building bridges: the 2012 Africa attractiveness report', E&Y stated that 73% of the respondents said Africa’s attractiveness as a place to do business continued to improve, while 60% of those surveyed believed that the attractiveness increased in the past three years.

About 5% of the respondents felt that the continent’s attractiveness was deteriorating, while 11% perceived that Africa’s appeal had waned over the past three years.

Overall, the survey reflected growing confidence in Africa’s prospects, said E&Y managing partner for Africa Ajen Sita on Thursday.

The number of new foreign direct investment (FDI) projects in Africa increased 27% from 675 in 2010, to 857 in 2011. This was up from 339 new projects recorded in 2003.

Developed markets accounted for 66% of the overall projects and emerging markets were responsible for the remaining 34%. The survey found that the top investors into Africa included the US, France, the UK, India, and the United Arab Emirates. South Africa was listed as the sixth largest FDI investor, while Nigeria and Kenya were listed in the top 20.

E&Y forecast that the continent would experience a robust growth rate of between 4% and 5% a year for the next ten years, while FDI into Africa was expected to reach $150-billion by 2015.

Sita added that Africa’s economic output increased from a gross domestic product (GDP) of $516-billion in 1995, to a GDP of $1 855-billion in 2011. This was expected to reach $2 545-billion in 2016.

However, despite this growth, Africa only attracted 5.5% of global FDI projects in 2011.

The firm attributed this in part to a perception gap that remained between those investors with an established presence in Africa, who believed that only Asia represented a more attractive option, and those who have yet to invest, who perceived Africa in an “overwhelmingly” negative light.

“Despite high optimism, high growth and high returns, the perception gap still exists and the African continent as a whole still attracts fewer FDI projects than India, and far fewer than China,” he said, adding that there was work to be done by the private sector and governments in Africa to better articulate and “sell the growth story and investment opportunity” for foreign investors.

The survey revealed that, of the respondents with no presence in Africa, 87% and 82% cited political instability and corruption, respectively, as concerns, while 67% believed the ease of doing business was a significant factor for potential investors.

However, Sita pointed to the improving business environment. The World Bank’s ‘Ease of Doing Business’ rankings, ranked 16 African countries ahead of Brazil and 17 ahead of India, while Transparency Internationals ‘Corruption Perception Index’ found that 13 African countries ranked higher than India and 34 ranked higher than Russia.

“Perceptions that corruption is rampant across the continent, or that African countries are inherently more corrupt than other rapid-growth markets, do need to be challenged,” the survey stated.

Further, Sita said that 33% of the top 30 economies that improved the regulatory environment for business the most over the past five years were in sub-Saharan Africa and that Africa’s political progress, which had steadily improved over the past 20 years, mirrors economic growth.

Most African countries have transitioned, or were currently moving toward some form of participatory democracy, which had in turn decreased armed conflict in Africa, the survey further pointed out.

Sita also noted that significant improvements in trade agreements, regional integration and increased investment in infrastructure, would ‘push Africa into the top league’ of investment destinations.

Meanwhile, African countries were increasing the number of intra-Africa investments, with the number of FDI projects growing from 27 in 2003, to 145 in 2011, accounting for 17% of all new FDI projects on the continent.

“There has been a radical shift in mindset and positioning over the last decade, with Africans themselves increasingly leading from the front by providing African solutions to Africa challenges” he concluded.

Edited by: Mariaan Webb
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Statistical Releases News
Pulp and paper producer Sappi has increased its net profit for the three months to March 31, by 75% to $56-million, compared with the profit of $32-million recorded in the March 2014 quarter.
South Africa’s manufacturing production increased by 3.8% year-on-year, owing to a 8.2% increase in the food and beverages sector, which contributed 1.9 percentage points, Statistic South Africa said on Tuesday. The manufacturing of petroleum, chemical products,...
Article contains comments
More
 
 
Latest News
South Africa’s crude steel production dropped by a sizeable 17.2% year-on-year to an estimated 530 000 t in April, amplifying a global trend that saw world steel production decline by a comparatively marginal 1.7% to 135-million tons in the fourth month of the year....
The Treasure the Karoo Action Group (TKAG) on Friday called on government to delay publishing final regulations and issuing rights for shale gas exploration in the Karoo, until a 24-month strategic environmental assessment (SEA) has been concluded. TKAG CEO Jonathan...
More
 
 
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
 
 
 
 
 
This Week's Magazine
While economic forecasts for the African continent are most favourable, African airlines may not be able to benefit from the expected growth in the region’s gross domestic product (GDP), International Air Transport Association VP: Africa Raphael Kuuchi has warned....
The Automotive Production and Development Programme (APDP) will need to change substantially post 2020, says Metair Investments South African operations COO Ken Lello. “We must not make tweaks. We have to change. What we are doing is not sustainable.”
Banking group Absa’s forecast is for the rand to end the year at around R13 against the dollar, weakening further to R13.50 by 2016, says Absa sectoral analyst Jacques du Toit. He warns that possible interest rate hikes in the US may see capital being pulled from...
The Dispute Resolution Centre at the Bargaining Council for the Civil Engineering Industry (BCCEI) is now open to handle party-to-party disputes. The BCCEI represents the interests of all level four to nine Construction Industry Development Board companies.
FREDRIK JEJDLING Sustainability becomes an important part of a business’ decision-making process
Communications technology firm Ericsson sub-Saharan Africa head Fredrik Jejdling says the company’s commitment to sustainability and corporate responsibility has been integrated into all facets of its operations, which has provided it with sustainable revenue...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96