EY-africa-attractiveness-survey-june-2015-final

Executive summaryFDI project numbers fall, but capital investment and jobs surgeGeopolitical tensions and weak economic growth ledto a 3.1% decline in greenfield FDI projects worldwidein 2014. FDI projects in Africa fell 8.4%, but remainedwell above pre-2008 levels. However, capital investmentinto the continent surged to US$128b, up 136%. AndFDI created 188,400 new African jobs, a 68% increase.Spurred by a handful of megadeals, the averageinvestment increased to US$174.5m per project, fromFDI projects by world region (% change, 2014 vs. 2013)Latin America and the CaribbeanSource: fDi Markets, January 2015.Asia-Pacific 17.3%North America 14.0%AfricaWestern EuropeMiddle EastRest of Europe-8.4%-14.8%-17.5%-17.7%-21.3%US$67.8m in 2013. Africa’s share of global capitalinvestment and job creation hit an all-time high in2014. Only Asia-Pacific attracted more FDI funds thanAfrica last year. Africa attracted more FDI funding thanNorth America, Latin America and the Caribbean, andWestern Europe, which historically draw significantlyhigher FDI flows than Africa.North Africa rebounds, but FDI in SSA shows contrasting trendsPolitical uncertainty following the Arab Spring in 2011is beginning to fade, and North Africa is becoming moreattractive as an investment destination. FDI investorsreturned enthusiastically to Egypt and Morocco.FDI by destination region (% change, 2014 vs. 2013)West AfricaFDI projects23% down15% YOY drop in FDI projects49% share of Africa’sFDI capital in 2014 —down from 81%Source: fDi Markets, February 2015.North AfricaSSA22% YOY rise in FDI projects51% share of Africa’sFDI capital in 2014East AfricaFDI projects12% downSouthern AfricaFDI projects11% downCapital136%YOY growthin FDI value in 2014Jobs68%YOY growthin jobs createdby FDI in 2014Project numbers in SSA reached their lowest pointsince 2010, however. Within SSA, some economies —including South Africa, Angola, Nigeria, Ghana andKenya — received fewer FDI projects. But Ethiopia andMozambique attracted growing inflows of projects.p.8p.11Note: The analysis of FDI data in this report includes a program of 13 construction projects in North Africa,worth a total of US$40b, announced in March 2014. However, as of May 2015, there is still someuncertainty regarding whether the program will go ahead.4 EY’s attractiveness survey Africa 2015 Making choices