Africa Foreign Investor Survey 2005 - unido

Entry period (start of operations)
Entry period (start of operations) – regions
of investor origin and subsectors
Figures 4.59–4.60 give the age distribution for the
regions of investor origin and of the subsectors.
The investors that had established their operations
before 1980 were typically European in origin and were
concentrated in the utilities sector (electricity, gas and
water supply); construction; basic metal production; publishing
and media; and non-metalic mineral production.
Figure 4.59 Start-up period of investors by region of origin
Asia
Middle East and
Northern Africa
Sub Saharan Africa
(ex. South Africa)
South Africa
The Americas and
Oceania
Europe
16
13
15
12
14
8
2
20
19
199
3
74
69
62
53
50
37
204
0% 20% 40% 60% 80% 100%
1980 and before 1981-1990 1991-2000 2001 and after
Note: Numbers in columns represent frequency for each category
Figure 4.60 Start-up period of investors by subsector
Garment, Apparel & Leather
Wood prods. & Furniture
Transport & Communication
Professional Services
Textile
Chemical, Plastic & Rubber
Financial intermediation
Food & Beverages
Marketing, Sales, Distribution
Agric., Fish & Nat. Resources
Paper & Paper prods.
Hotel & Restaurant
Auto, Machinery & Equipm.
Non-Metalic mineral prods.
Publishing & Media
Basic Metals
Construction
Elec., Gas & Water supply
2
4
16
7
2
14
32
23
35
55
13
4
2
15
13
10
7
15
15
12
6
2
15
11
16
14
2
9
16
6
3
6
14
10
2
27
3
17
5
1
44
71
100
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
1980 and before 1981-1990 1991-2000 2001 and after
Note: Numbers in columns represent frequency for each category
14
61
49
5
25
16
12
9
7
66
13
45
57
14
17
13
33
18
18
9
94
22
34
35
49
8
9
3
9
13
4
7
3
3
Large TNCs are the most well-established (oldest) foreign
investor type, 43 per cent of all L-TNCs had started operations
before 1980 (less than 20 per cent of all S-TNCs
and FE firms started operations before 1980).
Entry period (start of operations) –
size of firms
Figures 4.61–4.63 (and annex table 3.4) give the size distribution
of the firms for the four start up periods. On
average, firms that had more than 25 years of operating
experience in sub-Saharan Africa had established a dominant
position in the economies in which they were
located.These firms established before 1980, on average
have a higher book value ($34 million), greater sales ($29
million) and employ more people (560) than firms established
afterwards. It is also noticeable that few firms in the
total sample were established in the decade 1981–1990 –
less than 10 per cent.
New inward foreign investment picked up during the
1990s, so those firms established between 1991 and 2000
constituted 30 per cent by book value of all firms in the survey
sample. In this decade, there was an influx of a wide
variety of service providers – hotels and restaurants; financial
intermediation; marketing, sales and distribution;
transport and communications; and professional services.
This trend seems to have continued into the new millennium
with firms established from 2001 onwards accounting
for nearly 20 per cent of the total sample’s book value.
At a sectoral level, new arrivals after 2001 have typically
flowed into the primary agro-industries (especially in horticulture)
and into manufacturing – wood products and furniture;
textiles; and garments and leather goods. There
have also been notable, very large investments by mobile
phone companies, particularly from South Africa.
When examined in terms of where investors had originated
from and when their operations were established,
the observation was noted that there was a sharp
decrease in the proportion of investors from the north
over time (figure 4.20). The statistical significance of
this finding is very high 11 . At a region of origin level the
shift is even more dramatic. Only 15 per cent of sub-
Saharan African and 18 per cent of Asian firms in the
survey were established before 1991. The big surge in
investors from South Africa occurred between 1991 and
2000– no less than 50 out of 84 firms in the survey.
Nearly 40 per cent of the surveyed firms from Asia and
sub-Saharan Africa were established in the period after
2001. Many of these recently established firms were
small – half had sales of less than $600,000 and book values
of less than a million USD. As shown earlier in Figures
4.21 through 4.23, the recently established South
firms are larger than recently established North firms for
all average and cumulated figures of book value, sales
and workforce.
11 Chi (3,1173)=115.565 and p