Foreign investment in Africa has grown strongly in the past decade, as the continent has offered strong growth rates and high returns, Consultancy Ernst & Young said on Tuesday. Foreign direct investment jumped 87 percent, from 338 new projects on the continent in 2003 to 633 in 2010, the firm said in a survey of Africa.
Ten African countries attracted 70 percent of those projects: South Africa, Egypt, Morocco, Algeria, Tunisia, Nigeria, Angola, Kenya, Libya and Ghana. "Africa has remained an attractive investment destination throughout the global downturn and has managed to maintain its relative share of global investment flows as a result," the company said.
"Strong growth in new projects into Africa is expected from next year with FDI inflows forecast to reach $150 billion by 2015." According to the firm, investments started picking up in 2008, at the height of the global downturn, after a drop in previous years.
"There are of course parts of the continent where there are real and perceived barriers to investment due to political instability and corruption," said Ajen Sita, managing partner for Africa at Ernst & Young. "These are obvious challenges but those investing in Africa, and Africans themselves, have much to be positive about," he added.
"Although the African share of global (foreign direct investment) has grown over the past decade, we believe that it does not reflect the increasing attractiveness of a region that has one of the fastest economic growth rates and highest returns on investment in the world," said Sita. The report noted that a diverse range of sectors has emerged as attractive investment options, like tourism, consumer products, construction, telecommunications and financial services.
The survey came ahead of the 21st World Economic Forum on Africa, which starts Wednesday in Cape Town, to discuss how sub-Saharan Africa can sustain growth and increase its economic potential. The three-day forum will be attended by regional leaders of governments and businesses.
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