Egypt, Kenya, Morocco, Nigeria and South Africa collectively attracted 58 per cent of the continent’s total FDI projects in 2016
According to EY’s latest Africa Attractiveness report, heightened geopolitical uncertainty and “multispeed” growth across Africa present a mixed FDI picture for the continent.
The report provides an analysis of FDI investment into Africa over the past ten years. The 2016 data shows Africa attracted 676 FDI projects, a 12.3 per cent decline from the previous year, and FDI job creation numbers declined 13.1 per cent. However, capital investment rose 31.9 per cent.
The surge in capital investment was primarily driven by capital intensive projects in two sectors, namely real estate, hospitality and construction (RHC), and transport and logistics. The continent’s share of global FDI capital flows increased to 11.4 per cent from 9.4 per cent in 2015. This made Africa the second-fastest growing FDI destination by capital.
Ajen Sita, Africa CEO at EY says, “This somewhat mixed picture is not surprising to us. Investor sentiment toward Africa is likely to remain somewhat softer over the next few years. This has far less to do with Africa’s fundamentals than it does with a world characterised by heightened geopolitical uncertainty and greater risk aversion. Investors with an existing presence in Africa remain positive about the continent’s longer-term investment attractiveness, but they are also cautious and discerning.”
