Business
Africa Investment – From Foreign Direct Investment to Africans investing in Africa
(Reuters) – Investors from Europe, Asia and the United States are not the only ones chasing growth opportunities in Africa these days – Africans themselves are waking up to the potential across borders in their own backyard.
The same trends that have lured foreign capital to the continent – rising wealth, sustained economic growth and a swelling young population – are attracting investors in Ghana, Kenya, Mozambique, Namibia, Nigeria, South Africa, Tanzania and Uganda.
Between 2003 and 2011, intra-African investment into new foreign direct investment (FDI) projects in Africa grew at a 23 percent annual compound rate, according to Ernst & Young. Since 2007, that rate has increased to 32.5 percent, more than double the growth in investment from non-African emerging markets and almost four times faster than FDI from developed markets.
As Nigeria’s finance minister Ngozi Okonjo-Iweala told this year’s World Economic Forum on Africa: “We focus on FDI all the time. How about AIA – Africans investing in Africa.”
Cross-border African investment is set to accelerate as local firms seek new markets, resource-rich countries launch sovereign wealth funds and assets held by pension funds grow.
Underpinning this are the favorable demographics of Sub-Saharan Africa, the world’s youngest region, which will be the only region of the globe not to experience a decline in its saving rate by 2030, according to the World Bank.
By the middle of the century, Africa’s working age population will number 1.2 billion people, from around 500 million today, meaning it will provide one in four of the world’s workers, compared to one in eight from China.
