East Africa closes the FDI gap, with Kenya a big gainer % share (2015) 21.5% 28.5% North Africa 29.8% % share (2015) 22.3% 29.7% 21.5% % share (2015) East Africa % share (2015) 26.2% 19.5% 25.8% 2.3% 2.0% 3.6% % share (2015) FDI projects 27.6% FDI value Jobs created Southern Africa 20.3% 19.2% Source: fDi Markets, EY analysis 14 EY’s Africa Attractiveness Program 2016 Staying the <strong>course</strong>
FDI projects, 2005-15 (% share) FDI capital, 2005-15 (% share) 70% 70% 60% 60% 50% 50% 40% 40% 30% 26.9% 27.6% 30% 26.2% 20% 20% 29.3% 29.7% 20.3% 11.9% 10% 10.5% 10% 0% 2005 2007 2009 2010 2013 2015 0% 2005 2007 2009 2010 2013 2015 Central East North Southern West Central East North Southern West In 2015, East Africa recorded its highest ever share of FDI projects in the continent, achieving 26.2% of total projects. This means that the sub-region could pose a challenge to Southern Africa’s historical FDI leadership. Kenya, East Africa’s anchor economy, posted a resurgence in FDI in 2015. The country has bucked the trend of slowing economic growth experienced across most of Africa. It posted a GDP growth rate of 5.6% in 2015, which is set to accelerate to 6.0% in 2016. 3 In line with this, the country saw its FDI project numbers surge more than 50% over 2014 levels, becoming the 2nd largest FDI recipient, after South Africa. UK investors were particularly active during the year, as were those from India. By sector, TMT was the clear leader, with FDI projects doubling from 12 in 2014 to 24 in 2015. Financial services and RHC also saw noticeable increases in FDI projects. Other East African economies — Uganda, Tanzania and Rwanda — also reported higher inward investment project numbers. While recent oil and gas discoveries in Uganda and Tanzania have placed them on investors’ radar, Rwanda has gained interest largely due to the countries strong economic growth record and its pro-business climate. The World Bank ranks it as Africa’s second most businessfriendly destination. 4 Rwanda is increasingly marketing itself as a continental hub for services. 5 According to the 2015 National ICT Strategy, government aims to transform Rwanda from an agrarian economy to an ICT-driven, knowledge economy by 2020. 6 Ethiopia is another economy of interest to investors, also highlighted as an emerging FDI destination in our previous edition of the Africa Attractiveness survey. In 2015, the country retained its position as the eighth-largest investment destination in Africa, despite a 6.3% drop in FDI projects from 2014. The Ethiopian Government has prioritized developing a light manufacturing hub for light manufacturing a key priority. Wages in Ethiopia are Power costs are also relatively low. A number of investors have recently set up operations in the country, with Unilever building a Ethiopia. 7 3 World Economic Outlook Database, International Monetary Fund, 2016. 4 World Bank, 2015. 5 ” Financial Times website, www.ft.com, accessed 3 June 2016. 6 Rwanda: A new model for growth, Financial Times, 2016. 7 Ethiopian industry: still banking on China,” Financial Times website,” Financial Times website, next. ” Reuters News, 9 February 2015, via Dow Jones Factiva, © 2015 Thomson Reuters. EY’s Africa Attractiveness Program 2016 Staying the <strong>course</strong>
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