Who is investing in Africa?Since the global financial crisis, African investors have played a larger role in an FDI recovery.
Future trendsGrowing private sector investment and a focus on the services sector will increasingly be features of African FDI inflows.
Emerging markets are becoming an important source of direct investment flows to Africa. While capital flows from India and China have risen, the most significant increase has come from within Africa itself. Private equity is also becoming an important source of capital for companies in Africa, as investors consider opportunities beyond extractive industries.
Sources AfDB, Emerging Markets Private Equity Association, OECD, UNCTAD World Investment Report, UNDP: African Economic Outlook 2015.
Notes Africa refers to all countries on the continent and Madagascar, excluding Egypt, Libya, Morocco and Somalia.North America consists of Canada and the United States. An infographic by The Economist Intelligence Unit
Private equity capital raised and invested in sub-Saharan Africa, 2010-2014 (US$m)
Value of greenfield private equity investments in sub-Saharan Africa, 2010-2014 (US$m)
Note: Sub-Saharan Africa is comprised of Africa, excluding Algeria, Egypt, Libya, Morocco, Sudan and Tunisia.
Investments(US$m)
Funds raised(US$m)
Primary(US$m)
Manufacturing(US$m)
Services(US$m)
21
7
31
23
40
2129
29
19
15
6
34
29
2238
1,687
1,908
1,130
1,632
4,020
709
1,366
993
1,221
1,940
In 2014, capital raised for Africa-focused private equity funds soared to a record US$4bn, and in 2013, the value of greenfield investments in Africa’s services sector exceeded the primary and manufacturing sectors for the first time.
2010
2011
2012
2013
2014
Number of greenfield projects in Africa by source of investment, 2003-2008 & 2009-2013 (%)
90%Outside of
Africa
82%Outside of
Africa
2003-2008 2009-2013
1%Nigeria
2%Nigeria
5%Rest of Africa
6%Rest of Africa
1%Kenya 3%
Kenya
3%South Africa 7%
South Africa
Kenya, Nigeria and South Africa are increasingly investing in greenfield projects in Africa. Intra-African investments are more likely to be focused on manufacturing and services rather than the extractive industries.
2003-2008 2009-2014
Africa China European Union India North America Rest of the world
11%
19%
2% 3%
41%
6%4%
18%
13%
18%21%
Sources of greenfield investment in Africa (% of all projects)
44%
Since the global financial crisis, advanced economies have generally reduced their investment in Africa. In 2009-2014, investment in Africa originating from Europe and North America fell to 41% and 13% of total investment, respectively, from 44% and 18% in 2003-2008. Meanwhile, African investment has grown to comprise around a fifth of greenfield investment in Africa.
Investment in Africa:Change is afoot
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