Despite some ongoing skepticism, the past decade has been one of robust and sustained growth in Africa. Africa’s rise is real
Africa’s rise over the past decade has been very real. While skeptics still abound, and there are people who still seek to debate the point, the evidence of the continent’s clear progress over the past decade is irrefutable.
Over this period, a critical mass of African economies have grown at high and sustained rates; so much so that, despite the impact of the ongoing global economic situation, the size of the African economy has more than tripled since 2000. The outlook also appears positive, with many parts of the region forecast to continue experiencing relatively high growth rates and a number of African economies predicted to remain among the fastest growing in the world for the foreseeable future.
However, FDI numbers do not fully reflect the broader growth story
Despite the ongoing growth and progress, greenfield FDI projects1 into Africa dropped year-on-year in 2012. Although this is obviously disappointing, it should be noted that the decline occurred in a context in which there were substantial declines in FDI projects globally.
In fact, the global situation was such that Africa actually grew its overall share of FDI project flows from 5.4 to 5.6%.
The perception gap remains a barrier for new investors
Our 2013 Africa attractiveness survey shows some progress in terms of investor perceptions since our inaugural survey in 2011. The majority of respondents are positive about the progress made in and the outlook for Africa. Africa has also gained ground relative to other global regions: whereas in 2011 it was only ranked ahead of two other regions, this year it was ranked ahead of five other regions, (the former Soviet states, Eastern Europe, Western Europe, the Middle East and Central America).
Focus on enabling those already doing business in Africa
The fact that there are a number of companies with an already established presence in Africa that are very positive about the continent’s growth prospects and are getting down to business is crucial. These are believers in the Africa growth story, who do not need convincing; they are growing their investments, creating new jobs and focusing on long term, sustainable growth opportunities across the continent.
A framework for business and government for supporting the productive and mutually beneficial expansion of private investment in and across Africa:
Perspective. The eye of the beholder: African business ventures can be risky, but no more so than those in much hyped emerging markets in other regions.
Planning. Patience and persistence = results: while it is often said that rewards go to the bold, in African investing it is also true that patience is a virtue (and pays).
Places. Seek platforms and hubs: Africa’s hallmark is diversity; the barriers to creating bigger and deeper common markets and trade areas are considerable, but are arguably receding.
Partnerships. Relationships matter: perhaps more than in any other continent – fostering good, proper relations with all levels of government will continue to be vital to realizing strategic aims.
People. No strategy is self-executing: sustainable success in Africa will increasingly turn on identifying, nurturing and retaining talented and committed local staff.