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FDI in Africa at all-time high

Cape Town - Although the number of foreign direct investments (FDI) fell by 8.4% in 2014, capital investment into Africa surged to $128bn, a year-on-year increase of 136%.

This is according to the recently released EY 2015 Africa Attractiveness Survey, which reveals that the average investment per project increased to $174.5m, up from $67.8m in 2013.

Charles Brewer, managing director of DHL Express sub-Saharan Africa, said that this is positive for the continent’s outlook, and highlights that FDI in the region is being stimulated by a number of megadeals, instead of numerous smaller deals.

“The perception of investing in Africa has traditionally been rather negative, coupled with the fear of the unknown. However, in 2014, traditional investors refocused their attention on the continent, attracted by its strong macroeconomic growth and outlook, improving business environment, a rising consumer class, abundant natural resources and infrastructure development," said Brewer.

"These factors resulted in global capital investment and job creation on the continent hitting an all-time high in 2014.”

Brewer said that efficient infrastructure is critical for ensuring the effective functioning of the continent.

“As it stands, underdeveloped infrastructure drives up logistics costs, and it is estimated that supply chain costs are up to nine times more expensive in Africa in comparison to other regions in the world," he said.
 
“With increased FDI and continued macro-economic growth, I believe that Africa will be an economic powerhouse in the future. The region abounds with untapped opportunities and has much scope for growth.”

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