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ey-africa-attractiveness-program-2016-staying-the-course
ey-africa-attractiveness-program-2016-staying-the-course
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Investors diversify focus<br />
across sectors<br />
Investors focus shifts from extractive industries to<br />
<br />
FDI projects, 2005-15 (%share)<br />
60%<br />
50%<br />
40%<br />
30%<br />
20%<br />
10%<br />
33.4%<br />
26.9%<br />
FDI value, 2005-15 (% share)<br />
44.7%<br />
5.8%<br />
0%<br />
2005 2007 2009 2011 2013 2015<br />
Extractive Consumer-facing<br />
60%<br />
50%<br />
40%<br />
30%<br />
20%<br />
10%<br />
59.3%<br />
8.3%<br />
33.9%<br />
17.0%<br />
0%<br />
2005 2007 2009 2011 2013 2015<br />
Extractive Consumer-facing<br />
In 2005, mining and metals accounted for 15.9% of FDI projects<br />
while coal, oil and natural gas made up another 11.0%. Since<br />
then, investment into the extractive sectors has slowed sharply. In<br />
2015, the extractive sectors’ share of total projects stood at just<br />
5.8% collectively, while consumer-facing sectors now account for<br />
an increasingly larger share of projects. Whilst the low commodity<br />
price environment and the broader global economic context may<br />
have slowed capital investment into coal, oil and natural gas in<br />
2015, investment in the mining and metals sector was up 45.9%<br />
year-on-year, albeit from a low base.<br />
From an initial strong focus on natural resources, a growing pool<br />
<br />
across more sectors. The promise of a large middle class has seen<br />
investors’ attention shifting toward consumer-facing sectors. As<br />
<br />
projects in Africa. These three industries have led investment into<br />
Africa almost every year since 2009. In 2015, these three sectors<br />
accounted for 44.7% of FDI projects, though investment was down<br />
on the previous year<br />
In our previous edition of the Africa Attractiveness Survey, we<br />
<br />
investors. With a 12.8% increase in FDI projects in 2015, RHC<br />
<br />
infrastructure projects in Kenya saw increased investments, as did<br />
opportunities in Morocco and South Africa. The continent is seeing<br />
a boom in the real estate and hospitality sector, marked by a fastgrowing<br />
population with higher spending power and rapidly moving<br />
<br />
infrastructure development across Africa. Finally, an underserved<br />
hospitality market (despite a strong outlook for tourist and<br />
business arrivals and increasing regional and international trade)<br />
has prompted several international hotel chains to invest across<br />
the continent.<br />
<br />
<br />
<br />
* Extractive sectors include coal, oil and natural gas as well as mining and metals; consumer-facing<br />
sectors include TMT, CPR and financial services.<br />
Source: fDi Markets, EY analysis<br />
EY’s Africa Attractiveness Program 2016 Staying the <strong>course</strong><br />
27
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