The World Bank, in a document titled “Africa’s Pulse” estimates that at the end of 2011, foreign direct investments (FDI) into Sub-Sahara Africa will hit a record high of $40.8 billion.
The extractive industries is expected to receive majority of these FDIs into the continent due to its perceived potential growth with some sectors such as tourism, consumer products, construction , telecommunications and financial services emerging as attractive investment options, said the group.
According to the World Bank, FDIs into Africa rose to $32 billion at the end of 2010 with prices of oil and metals exports seen as the main drivers.
“Strong growth in new FDI into Africa is expected from 2012 onward, reaching $150 billion by 2015”, EY indicates in a press release on its website citing its first ‘Africa Attractiveness Survey’ which interviewed over 562 global executives on their views about how and where investments will take place in the next decade.
It added, “The continued growth of FDI will be based in part on the economic recovery of Africa’s main developed market investors, and the continued strong growth of emerging markets such as China and India.”
According to the survey, over the last decade investments from emerging markets into Africa have increased rapidly from 100 new projects in 2003 to 240 in 2010 (representing an annual growth of 13% per year).
“Emerging markets investment now comprises 38% of the total into Africa; up from 30% in 2003,” it said.
EY’s analysis of projects shows investment success stories across the continent with ten African countries including Ghana attracting 70% of the new FDI projects between 2003 and 2010.
EY said an estimated 350,000 jobs will be created in 2015 alone.
When it comes to future investment strategies, Africa is high on the agenda of global investors, with 42% of the businesses surveyed considering investing further in the region and an additional 19% of executives confirming they will maintain their operations on the continent, EY says.
By Ekow Quandzie