Africa foreign investment more than doubled since 2003, 875 new projects in 2011
A survey of over 500 international business leaders in 38 countries showed a 73% improvement in Africa's attractiveness three years hence. But strangely, an 11% deterioration was reported when it came to perceptions of Africa's attractiveness as a place of doing business.
The Ernst & Young Africa Attractiveness Survey, released on Thursday, reported that foreign direct investment into Africa had more than doubled from 339 new projects in 2003 to 857 in 2011 - up by 153%.
Michael Lalor, head of Ernst & Young's Africa Business Centre, said actual projects and jobs prospects told a much richer story than just where capital was going on the continent.
The survey showed that intra-African investment had grown from 27 new projects in 2003 to 145 in 2011 - 17% of all new foreign direct investment (FDI) projects on the continent last year.
Though FDI into Africa is expected to reach US$150 billion by 2015 and GDP growth will remain at a robust 4%-5% a year in the next decade, Africa only attracted 5.5% of global FDI projects in 2011 from 4.5% in 2010.
Not surprisingly, political stability and curbs on corruption were the two biggest issues affecting sentiment, with ease of doing business the third biggest concern.
But Sita (State Information Technology Agency) said progress was being made, as there had been 30 moves to democracy since 1990, and when mapped out, these also mirrored improvements in economies.
"That story is not really getting out, or understood," he said.
Declining rates in poverty could also be seen from 1995, and significantly since 2005.
Lalor said government and business needed to work together more closely to close the perception gap and that far more private sector involvement was needed on the execution of infrastructure projects.
"E-tolls in SA is an example of how fraught that process can be," he said.
An e-toll tender in SA was awarded to a consortium now majority owned by an Austrian company and has been delayed indefinitely due to a court challenge and nigh national revolt on the high administration charges.
And many infrastructure projects have faltered, with the national hospital in Luanda built on Chinese aid money virtually falling down and forcing patients into tents in 2010.