Africa has risen to become the second most attractive investment destination in the world, Ernst & Young’s latest Africa attractiveness survey shows.
This year’s survey, which measures foreign direct investment into the continent as well as investors’ perceptions and actual investment levels, showed that Africa and Asia are tied in second place, just behind North America as the world’s best investment destinations. As recently as 2011, Africa ranked a distant eighth place, behind Latin America, the Middle East, Eastern Europe and other regions.
Some other key findings:
- Africa’s share of global foreign direct investment (FDI) reached 5.7%, in 2013, the highest level in a decade. The average size of FDI projects increased to $70.1 million, from $60.1 million in 2012.
- FDI is increasingly being directed to consumer-facing industries such as technology, media, retail and financial services that can serve a growing consumer class.
- Intra-African investment is also on the rise.
While the report showed many encouraging signs, it also noted a striking perception gap between those already doing business in Africa and those with no business presence there. “Those who are yet to invest are far less enthusiastic,” the report noted.
“Africa is an inherently challenging place to do business but many companies pursuing a long-term African strategy have generated excellent returns from their investments,” it said.
The full report is available here.