Africa remains a virgin land of resources and opportunities, as well as, a consumer market with a growing population.
China is poised to take advantage and strengthen its influence on the continent. That much was clear last year Foreign Direct Investment (FDI) from China to Africa grew sharply with a 106% rise in projects, according to Ernest & Young’s Attractiveness Program Africa 2017. In comparison, FDIs by the US and UK fell 5.2 and 46.8% respectively. Average FDI investments grew 31.9% to $139 million from $92.5 million in 2015.
While still behind UK and the US in terms of number of FDI projects on the continent, the value of China’s FDI investments in 2016 topped other foreign investments as reflected by the report.
China’s 2016 FDI input in Africa ranked highest across three main metrics measured; Projects, Capital Investment and Jobs, EY suggests that Donald Trump’s presidency and United Kingdom’s impending brexit may be the main factors behind the current set back, yet China’s prominence on the continent is only likely to increase in the coming years.
South Africa remained the largest hub of FDI projects in Africa despite its economic and currency struggles mainly due to political uncertainty. It retained “it’s appeal as a launch-pad for growth across the continent,” the report says. South Africa was also the largest intra-regional investor on the continent spending $1.6 billion. Including South Africa, Nigeria, Morocco, Kenya and Egypt, while some of Africa’s larger economies, accounted for 58% of the continent’s total FDI projects in 2016.