May 9th, 2011
10:13 AM GMT
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Assessing attractiveness can be a subjective undertaking.

However, an international company has used objective data to examine Africa’s “attractiveness” as a place to do business.

Ernst and Young launched its “Africa attractiveness survey” at the World Economic Forum on Africa in Cape Town. It makes for interesting reading if you want to understand the perceptions surrounding business in Africa.

The firm polled 500 companies from around the world, as well as Africans themselves, and found that - no surprises here - Africa is becoming increasingly attractive to international investors.

Importantly, emerging-market investors were more positive about Africa’s long-term prospects than developed-world investors, which obviously points to stronger and deepening relationships between the BRICS countries and the rest of Africa. Ernst and Young note that the mining and manufacturing industries, in particular, experience a strong capital influx from emerging-market economies.

What will cheer many within the continent is the huge optimism Africans feel towards business opportunities in their own backyard. Africans themselves are leading the growth in investment.

This is key. There is a growing self-confidence amongst Africans, as well as a growing awareness that regional barriers need to be broken down so that intra-African trade can be increased.

So while reports like these - and there were many at this year’s World Economic Forum on Africa in Cape Town - make for happy reading by Afri-optimists, it is worth putting a sobering note on the assessment.

Significantly, three quarters of foreign direct investment was in just 10 countries, out of a continent of more than 50 states. Why are the 40 other Africa nations considered to be the “ugly sisters?”

There are many reasons - beyond political instability - like bad infrastructure, red tape and a lack of skills, that are cited as common reasons for a lack of investment.

Mostly, though, there is a lag between the optimism directed towards Africa and capital flows. Foreign direct investment is still relatively low when compared on a global scale and African intra-trade is woeful.

Although beauty is in the eye of the beholder, many would like to see more tangible benefits to Africa’s growing attractiveness.



soundoff (18 Responses)
  1. Aly-Khan Satchu

    Africa previously suffered from an egregious Perception Gap. The World Cup was actually coincident [I believe] with the Elastic Band snapping and Perception starting to narrow with Reality. Wal-Mart's Purchase of Mass Mart was the Wake Up Call for North America. This Narrowing of the Perception Gap is a Sweet Spot for Investors. The Maghreb is surely entering a New Normal post Mohammed Bouazizi but crossing the Portal might be a long drawn out Affair. Africa is not monolithic in the Year 2011.
    Aly-Khan Satchu
    http://www.rich.co.ke
    Nairobi

    May 9, 2011 at 2:46 pm |
  2. AR

    Just a correction on this story in the following paragraph:

    Significantly, three quarters of foreign direct investment was in just 10 countries, out of a continent of more than 50 states. Why are the 40 other Africa nations considered to be the “ugly sisters?”

    It should read "...out of a continent of more than 50 countries..."

    May 10, 2011 at 2:09 pm |
  3. violet

    yeah we know all that,but until the region stablishes all the gains will be post.CNN please report on Africa-BBC is leading wiht the Crisis in Uganda and CNN is still focused on Bin Laden-the story is old.Move on,there's nothing else to say.Alot of countries in Africa are having political and economic upheaval and you are still silent-

    May 11, 2011 at 10:41 am |
  4. Denis

    Problem in countries of Africa is not just corruption and the dictatorial rulers. One of the big problem for employers is lack of work ethics and low productivity of workers.

    May 11, 2011 at 3:26 pm |
  5. TruthSeeker

    If the US stopped focusing on 'business interests', it may be better able to focus, more effectively, on the 'human interests'. Wouldn't the world be a better, safer, sustainable place if all economic power were abolished?! Set our people free from the yolk of oppressive businesspeople!!!

    May 11, 2011 at 6:40 pm |
  6. Joe Lamport

    Find out more about opportunities in West Africa through the USAID West Africa Trade Hub. We follow business across 21 countries, from Gabon to Senegal, Chad to Sierra Leone. There's good reason for optimism in Africa - the business climate improves almost daily... http://www.watradehub.com

    May 12, 2011 at 11:31 am |
  7. Alphonse Kingori-Nairobi.

    even as investors continue to eye the BRIC, Africa cannot be ignored.With the emergence of mobile technology,progressive increase in the middle class, and increased accountability ,Africa will be the next frontier.

    May 12, 2011 at 7:01 pm |
  8. bms

    Maybe its best that things remain this way. That way, more of whats available will remain within. Otherwise everything will be taken by just a few. When the world wakes up, they will be faced with another China.

    May 13, 2011 at 7:59 am |
  9. Kitanda

    We have a whole new problem, China shall behave in the same manner that the Europeans did, now the US empire is ending, the Chinese are all over the continent conducting infrastructure projects, and technological upgrades, once the US falls then the Chinese shall take over Africa for resources only, their projects shall end and we shall be paying them back for a long time to come.

    May 15, 2011 at 4:09 pm |
  10. onyeejp

    To be honest with you if chinese gorverment did`nt started puting in there money & techinologies in Africa ,since over 15yrs and they`re making a lot of proft ,EU&USA will not listen to ours.

    AFRICA is still a vegine land for anything u may think off, but the must problem we have today is our leaders secondly , ODA.UNESEF,RED-CROSS they should pls stop sending money to AFRICA insted they should be talking of bluding an industries were ordnary pupiles can work and be payed that is the must things that they have to look in to it.

    May 23, 2011 at 11:18 am |
  11. Engineer James Dada Oruwa

    Africa is a blessed continent and beautiful place for investment. It has good climate and natural resources that lure and aid investment but it has bad governance and corruptions which have spiralled over the years among the leaders and individuals. But whoever what to invest in Africa should go ahead.The U.S and E.U should try to produce their products at a lost cost and sell them in Africa. That is what the Chinese are doing at present.

    May 26, 2011 at 2:41 pm |
  12. fedyy1

    Africa is gradually gaining economic stability. Countries such as Rwanda experience one of the largest economic gains in the world- 15% annual growth.

    Internet is East Africa is growing at an annual rate or 80% per annum. ICT in general is growing at a rate of about 20%.

    Private equity firms from Europe and US are flocking to Africa in herds. A number of equity firms that recently launched in Africa include; CDC, Catalyst Principal Partners, The TBL Mirror Fund and many more….

    Africa is the place to be.

    Regards

    Ferdianand

    http://www.propertyzote.com
    http://www.hotelzote.com

    May 30, 2011 at 1:18 am |
  13. Abu

    The western countries only started talking about attractiveness of investing in the African countries after China started investing in Africa !!!

    June 4, 2011 at 9:52 am |
  14. sandeep

    we are looking for suitable equity partners in mining project in Africa for which we have acquired the licenses ,please contact us sandeep at lukasa-energy dot net

    June 5, 2011 at 7:41 pm |
  15. Lost

    Does the upsurge of "Arab Unrest" have any connection with the international probe and interest in USA plans (United States of Africa)?

    June 6, 2011 at 7:03 am |
  16. Eathwild

    CNN, thanks for your focus on Africa the richest continent in the world, however you need to put your focus on the areas that are torn by war, give exposure to the more than 50 states and countries in Africa that you call "ugly sisters", probably by doing this you will bring more awareness to the plight of especially the women and children in these areas, that need to be educated in general. Big investors don't usually care about the well being of the people in the countries they invest, they only go in and exploit the peoples, but when you keep them honest, by your honest reporting, it will force them to change some of their policies, Africa has great human and natural resources.

    June 6, 2011 at 7:36 pm |
  17. Steph Kishau

    The USA is dying as an empire but the elite there are greedy for Africa's resources, just like the colonialists were. They do not negotiate like the Chinese do; they do not care whether they are fair to Africans or not.

    The west is investing in Africa because they have impoverished their own people with debts. I am an African in Canada so I do know all about their economies. We will get better returns with the Chinese but Affricans need to know how to NEGOTIATE!!! Many times a foreigner will come and is given your property by a government based 500 miles away in the city. No one should exploit the wealth of rural Africans without sharing it. If anyone extracts minerals from tribal land the wealth should be shared in thirds. Otherwise leave our resources alone.

    China is a good partner. Beware Americans and the globalists. They know about Nibiru and are trying to find a safer area to invest in. Americans only care about America. They have polluted the whole of N.America and have 140 nuclear power plants and with the many earthquakes we are seeing these days, America is toast!! If the New Madrid earthquake happens, they will be finished. Even Obama has forgotten Kenya in his priorities.

    God help us!!

    June 6, 2011 at 10:14 pm |
  18. bolarinwa

    "Maybe its best that things remain this way. That way, more of whats available will remain within. Otherwise everything will be taken by just a few. When the world wakes up, they will be faced with another China " This is the sumary of everything ! Thanks bms.

    June 19, 2011 at 4:23 pm |

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