On the international conference circuit over the past year, at events I have participated in from Europe to Asia, one topic has come up time and time again: the economic emergence of Africa. And more specifically, how best to access opportunities in the region. Investor interest in Africa appears to be at an all-time high.
Many companies are already there. According to data from fDi Markets, our proprietary service tracking crossborder greenfield investment, FDI into Africa increased by 65% in 2014, to $87bn. While project numbers declined 6% to 660, a raft of high-value projects pushed capital expenditure up to a five-year peak. FDI into Africa accounted for 13% of global FDI in 2014 – and this percentage seems set only to grow.
The shape of FDI into Africa is also changing. At first glance, extractive industries remain dominant – coal, oil and natural gas accounted for nearly 40% of greenfield investment last year – but that is largely due to the big-ticket nature of such projects. Delving a bit deeper, there are some encouraging trends. Manufacturing – so crucial to providing jobs in large numbers and a necessary platform for future moves up the value chain – was the top business function among investments, accounting for more than one-third of capital expenditure. Automotive components as an FDI industry saw its best performance on the continent since 2010. And real estate saw its highest investment levels since 2009, suggesting that developers and investors are betting big on future growth.
But if interest in Africa is stronger than ever, reliable data on the continent – the kind that investors need in order to make expansion decisions – remains weak. Looking below surface-level information is essential when eyeing Africa, yet not always easy to accomplish due to the dearth of comparative data and indicators across African countries. Providing this kind of comprehensive dataset is the purpose of Analyse Africa, a database from the Financial Times linked to fDi’s own data services, providing macroeconomic data from leading global sources on one digital platform. It was created to help bridge the data gap that exists when it comes to analysing and understanding this fast-growing continent.
It is just a starting point, however. The crucial second step for potential investors is moving from enquiring about Africa at conferences in London, Frankfurt or Hong Kong, to getting on the ground and investigating the growth prospects, as well as the challenges, first hand. The best advice I can give to those who have begun to wonder if they are missing out on the world’s next big investment opportunity is to use the data to draw up a shortlist of countries showing the right kind of investment profile for your industry, then click next on a flight-booking website.
Courtney Fingar is editor-in-chief of fDi Magazine. Email: firstname.lastname@example.org