Africa – the Emerging Destination for Foreign Direct Investment
by Richard Martin, Managing Director, Global Cash Management Barclays
There is no doubt that the African opportunity is significant – and today, no other continent offers such a unique mix of opportunity and challenge as Africa. With its population, huge land area and untapped natural resources, Africa’s potential is substantial, which has considerable implications for businesses and investors.
Africa is considered by many to be a land of opportunity and a continent which has found its growth momentum. Africa has emerged as an investment destination for a number of reasons, including its abundant natural resources, improving economic indicators and evidence of maturing political stability. Growth in the population, alongside a rise in consumption, has been a significant driver in the continent’s growth story.
The improving FDI (Foreign Direct Investment) flows seen in the region are another strong indicator of increasing global confidence in the region. The conducive environment for business, as reflected in the World Bank’s ‘ease of doing business’ rankings, is a further driver of the improving flows. In the index, 14 African countries were ranked ahead of Russia, 16 ahead of Brazil and 17 ahead of India, and this result has consequently attracted FDI flows into Africa from both developed and developing nations, with China being a key contributor.
China – an emerging investor
In recent years, China has emerged as a key investment partner for the African continent, investing heavily in both infrastructure projects, as well as in the health and education systems. This has enabled countries, including Angola, Ghana, Kenya, South Africa and Zambia, to develop their resources, thus fuelling regional growth.