Large parts of Africa have seen impressive and sustained economic growth patterns with the continents economic output tripling over the past decade. Political, economic and regulatory reform is reshaping the continent. Armed conflict has significantly reduced, providing the relative stability required for economic growth and development. Structural changes have helped invigorate markets and commerce, creating an environment that is increasingly conducive to business and investment.
Africa offers an exciting opportunity for investment and growth, and an alternative to the Asian and other rapid-growth markets, with 27 African countries having already attained “middle income” status.
EY’s Africa attractiveness survey showed 60% of respondents view Africa improving as a place to conduct business. A further 73% believe that this attractiveness will increase over the next three years, with only 4% believing the contrary. However, of these optimists, 92% are already active in business on the continent. Clearly, a stark perception gap exists between those already present versus those who are yet to invest in Africa.
Reality, Challenges & Risks
Corruption and political instability are both common and big challenges.
Geographically, Africa’s sheer size is in itself daunting leading to practical and logistical implications. Its 54 different countries are accompanied by a fragmented set of rules, regulations, stakeholders, languages, cultures and market dynamics.
Perceptions of Africa as a high risk, difficult, and sometimes dangerous place to do business are still very real and a thorough process of fact-based due diligence is needed in identifying and prioritizing markets for investment.
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This is an extract taken from our full The Emerging Powerhouse guide.