It's time for Africa

Ernst & Young has published the "2011 Africa attractiveness survey" report.

On Africa

"Africa currently attracts less than 5% of global FDI projects, which we believe does not reflect the increasing attractiveness of the African growth story. Africa is unusual in this respect. Although Africa’s proportion of global FDI has grown to some extent over the last decade, it does not accurately reflect a region that has one of the fastest economic growth rates and highest returns on investment in the world."

The graphs below tell an interesting story. Over the past 3 years, investors from all regions except North America and Europe have been positive and optimistic about the continents progress. As for future expectations, investors from all regions including North America but again excluding Europe are positive and optimistic about Africa.

I wonder why investors in Europe are consistently negative and pessimistic about Africa's investment attractiveness?

On Zambia

"Zambia’s copper mines will continue to attract investors over the forecast period, with global demand expected to keep prices high for the foreseeable future. Outside of the minerals sector, prospects for FDI are less good. Zambia’s reliance on copper (which makes it vulnerable to price movements), coupled with its small domestic market, will limit the flow of capital into the rest of the economy. But the country’s business-friendly environment, sound macroeconomic management and investment in the infrastructure network should attract multinational companies into other parts of the economy."

Top five investors in number of FDI projects in 2003-10

• South Africa

• China

• Canada

• India

• UK

Top five sectors in number of FDI projects in 2003-10

• Metals

• Financial services

• Alternative and renewable energy

• Chemicals

• Communications

http://www.ey.com/Publication/vwLUAssets/2011_Africa_Attractiveness_Survey/$FILE/11EDA187_attractiveness_africa_low_resolution_final.pdf