Africa Foreign Investor Survey 2005 - unido

5. Analysis of performance
This chapter analyses investors’ self assessment of the
performance in their investments and discusses these
ratings in the light of growth rates of their operations. It
goes on to analyse future sales growth forecasts, capital
intensity and labour productivity.
Survey participants were asked to rate the overall performance
of their operations during the past three years
as either well below expectations; below expectations; inline
with expectations; above expectations or well above
expectations. They were also asked to report the percentage
growth of sales over the previous fiscal year and
forecast the annual increase in sales for the next three
years. This chapter provides an analysis of this selfassessment
and the past and predicted future sales
growth rates. In particular, the performance selfappraisal
will be looked at in the framework of sales
growth as reported last year.
In the 2003 survey it was observed that some classes
of investors, for example those in the garments and textile
sectors had very high growth rates and yet assessed
their overall performance as below expectations
(UNIDO, 2003). The question left unanswered was
whether these investors had very high expectations that
left them unsatisfied with even exceptionally high growth
rates or whether they were recent investors just beginning
to expand into recently installed capacity, thus
growing from a very low output base.
The chapter will go further into the analysis of growth
to see which investor groups have the strongest growth
rates and which expect to grow the fastest over the next
three years.This analysis will be concluded with discussions
about the relative efficiencies of the different
investor categories.
Evaluation of past performance
The growing evidence that foreign investment flows into
sub-Saharan Africa are improving, as presented in chapters
3 and 4, is further supported through trends in perceptions
of enterprise-level performance. In each of the
UNIDO surveys of 2001, 2003 and 2005, participants
were asked to evaluate their company’s performance over
the previous three years against their expectations.
Figure 5.1 (and annex table 5.1) compares the
responses to the self-appraisal in the three consecutive biannual
surveys and a clear growing bias toward “meeting
and exceeding expectations” is apparent. It is clear from
the replies that on average, the investment performance
in sub-Saharan Africa is slowly improving according to
existing investors. For example, in 2001, 53 per cent of
the sample rated their company performance as in line
with or above expectations, in 2003 this proportion
increased to 59.4 per cent while in the 2005 survey, 62
per cent of respondents rated performance as in line with
or above expectations.
Figure 5.2 (annex table 5.2) shows the distribution of
investor performance perception for each country. It is
interesting that the 2005 survey has a higher overall proportion
of satisfied investors despite the fact that the two
countries with the most unhappy investors in the 2005
survey had not been included in the previous surveys,
Côte d’Ivoire and Guinea, both of which have a much
higher rate (over 70 per cent) of disgruntled investors.
For all other countries, more than half of the surveyed
investors report performing in line with or better than
Figure 5.1
Percentage of sample population in 2001, 2003 and 2005
50%
45%
40%
35%
30%
25%
20%
Investors' self-evaluation of their performance
in three UNIDO surveys
15%
11.7%
10%
5.6%
10.9% 10.5%
4.7%
5%
4.6%
0%
Well above
expectations
Above
expectations
45.4%
43.0%
37.9%
In line with
expectations
31.0%
31.1%
39.8%
Below
expectations
2005 Survey
2003 Survey
2001 Survey
9.5%
7.3%
7.1%
Well below
expectations
5 | Analysis of performance
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