Africa by numbers

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Foreign direct investment (FDI) into Africa has increased signifi cantly over the last decade and this trend is set to continue, but the decision on where to invest in this vast and diverse continent can prove challenging, according to Ernst & Young’s Africa by numbers: Assessing market attractiveness in Africa (pdf, 2.4mb)  report out today. The report sets out the risk profi le of 17 of the most popular countries for investment in Africa and balances them against the rewards on offer.

Ajen Sita, Chief Executive Officer, Africa:

Over the past few years, the levels of interest in Africa have grown exponentially. What was, only a short while ago, a trickle of enquiries from our clients on opportunities for investment and doing business in Africa has grown into a flood.

On a daily basis, we are fielding requests for more information from clients globally. We are engaging with companies in our unique Cube environment to help stress-test their Africa growth strategies, and are leveraging our pan-African network and Growing Beyond Borders™ toolset to provide data and insights that support investment decision-making.

At the same time, we are proceeding with our own growth and integration journey. This year alone, we have opened new offi ces in Cameroon, Chad and South Sudan, and expanded our senior level capacity in key markets such as Nigeria, Angola, Kenya and South Africa, further entrenching our position as the leading professional services firm in Africa.

This report draws together much of this accumulated experience and knowledge, and builds on our fl agship Africa attractiveness survey to provide a “starter pack” for assessing, analyzing and prioritizing markets in Africa. While we are strong advocates for investment into Africa, we are acutely aware that, once one makes the decision to invest in the continent, the process of selecting the best markets in which to invest, can be far from straightforward.

Michael Lalor, Lead Partner:

What we offer in this report is an approach to developing a fact-based framework to support a broader strategic process of prioritizing and selecting markets. We have found that clients often overinvest in this part of the process, looking for defi nitive answers in spreadsheets, rather than using the facts to narrow options rapidly and move into execution mode.

The report is delivered in two sections. In the fi rst, we describe a process of objective and comparative analysis across a balanced set of indicators, focusing, fi rst, on risk, and, second, on opportunity. We then bring these two dimensions together, positioning different African markets on a combined “risk and reward” matrix.

In the second section, we provide more detailed country profi les for each of 17 African markets that are most frequently referenced in our conversations with clients, providing a high level country overview and insights into FDI trends and outlook for each market.

While there is clearly no template for doing business in and across Africa, we hope that this report provides a useful reference for categorizing and understanding how risk and growth opportunities vary across this diverse continent, and for supporting the more rapid conversion from strategy to execution.