AN updated report by KPMG has found that foreign direct investment (FDI) into Africa would continue to increase and what was seen currently was only the 'tip of the proverbial iceberg'. Africa would continue to be one of the largest FDI destinations and hold the fastest-growing economies, said KPMG chair Yunus Suleman in a Polity report.
The survey, African Emergence: Rise of the Phoenix, released ahead of the twenty-third World Economic Forum on Africa held late last week, said Africa 'rode the wave' of the global financial crisis better than most other economies and the continent was likely to help the now-struggling developed countries emerge from the remnants of the meltdown through investment opportunities.
FDI from emerging markets into Africa outpaced that from developed markets in 2012, but the number of new FDI projects into the continent fell 12% from the previous year. Money Control reports that this is according to Ernst & Young who said that despite this drop, which came amid a 15.2% global decline of FDI, Africa's share of global FDI rose in the past five years to 5.6% in 2012. Ernst & Young's 2013 Africa Attractiveness Survey said that African greenfield investments from emerging markets such as China and United Arab Emirates increased in 2012, while those from developed markets declined.
Confidence amongst business leaders in Africa remains the highest in the world, finds another survey. Moneyweb reports that after jumping more than six points in the previous quarter, the Young Presidents Organisation Global Pulse Confidence Index for Africa remained largely unchanged during the first quarter of 2013, edging down a third of a point to 67.3. The global composite index weighed in at 60.4. On a quarterly basis, the African region has consistently topped the global reading in all but one quarter since the inception of the survey in July 2009.
Another positive perspective comes from Regus, the world's largest provider of flexible workspace. It says key regions in Africa can look forward to improved employment prospects in the year ahead, reports African Business Review. Global research by Regus says many companies report rising revenue and profits and are looking to hire more workers.
The international study includes employers in North, East and South Africa. Joanne Bushell, Vice President Africa for Regus said: 'African employers are looking to expand despite a sometimes uncertain business environment.'
Business, however, needs to be ready to capitalise on the tsunami of investment heading for Africa. According to David Marchick, MD and global head of external affairs at The Carlyle Group in an African Business Review report, the continent is facing a major moment in its economic history - but if it is not ready, the wave of investment may destroy and not build African business. Africa, he said, has incredible potential and investors are scoping out possible partners across the continent.
The report says The Carlyle Group has joined with the African Development Bank to develop business on the continent in sustainable ways.
But despite the rosy forecasts, a myriad of problems and potential pitfalls remain. 'Good economic growth has not really made a difference to the livelihoods of millions of Africans,' Mwangi Kimenyi who works with the Brookings Institution, noted in a Deutsche Welle report.
Jennifer Blanker, chief economist at the World Economic Forum, warned that Africa's growth has been marked by gaps. Speaking at the launch of a report on competitiveness on the continent, she said African economies were lagging behind other emerging markets when it came to education, technology, infrastructure and governance.
Source: Africa Business