Business
Africa growth attracting more investment
Economists say Africa will grow by 5.5 percent in 2012, with seven African countries expected to rank among the 10 fastest-growing economies in the world during the next five years, projections that are making the continent an increasingly popular destination for foreign investors.
“There is a new story emerging about Africa; a story of growth, progress, potential and profitability,” global business consulting company Ernst & Young said in a May report on Africa’s attractiveness for foreign direct investment (FDI).
“Africa certainly has all the makings of a compelling investment case: natural resources, rapid economic and population growth, maturing political systems, a rapidly improving environment in which to invest and do business and investment returns that are second to none,” the report said.
Foreign direct investment projects across the continent grew 27 percent in 2011 from 2010, a “stellar performance” that continued a longer-term trend of FDI growth by 153 percent in absolute terms since 2003.
But despite this growth, the survey of more than 500 investors and business leaders highlights a so-called perception gap of Africa’s attractiveness.
“Those already doing business on the continent were overwhelmingly positive, ranking Africa’s relative attractiveness above every other region except Asia, and even then, only marginally so,” the report said.
“In stark contrast,” it said, “respondents with no business presence in Africa were overwhelmingly negative.” It said these respondents view Africa as “by far the least attractive investment destination in the world,” citing risk factors such as political instability, corruption and security as major obstacles.
