NAIROBI, Kenya, Jul 25 – Two trends defining Africa’s future growth plan are rising urbanisation and growing consumer class.
The trends have seen the continent’s Foreign Direct Investments (FDIs) inflows to move strongly towards real estate sector, hospitality consumer and construction sectors.
“Three consumer facing sectors – technology, media and telecommunication, Financial services and consumer products and retail continue to attract the largest share of investor activity according to the 2014 Africa FDI statistics,” said Ernest and Young Chief Executive Officer Africa Ajen Sita in an Interview with Capital FM Business.
Kenya is among the countries on the continent enjoying investment inflows especially in technology and telecommunications with those two sectors attracting over 40 percent of FDI capital since 2007.
The agriculture sector is also part investors are keen in getting into in Africa.
“According to our new report on attractiveness survey in Africa 2015, respondents from our survey are also excited about prospects in the relatively underexploited agriculture sector with 31 percent of them expecting agriculture to drive growth in Africa over the next two years,” he added.
According to the survey, investor perceptions of Africa have slipped marginally owing to political risk factors, such as instability and corruption that still remain the main barriers that discourage investment in Africa.
Other critical issues discouraging investments in Africa include weak security, poor basic infrastructure, and lack of highly skilled labour, unattractive tax policies and financial incentives as well as inconsistency and lack of transparency in regulatory policy.
He says North Africa is becoming more attractive as an investment destination as FDI investors returned enthusiastically to Egypt and Morocco.
On Kenya, Sita says the country will continue to be a key hub for investment into East Africa and is likely to consolidate its status as one of the most attractive investment destinations in Africa in coming years.
“Even with insecurity challenges, the country’s economy has remained robust and a key driver of growing levels of investment has been Kenya’s strong economic growth.
He says the strong economic growth is buoyed by ongoing market based economic reforms and benefits accrued from lower oil prices.
“As we look forward and given its ongoing economic resilience, an Improving business environment, a growing portfolio of active infrastructure projects and the potential of the broader East African Community, Kenya’s billing as a powerhouse in a dynamic, high growth region is certainly justified,” he added.
President Uhuru Kenyatta and visiting US President Barack Obama have lauded Africa’s fast rising star and called on world leaders to visit and explore investment opportunities.
Speaking during the opening of the Global Entrepreneurship Summit in Nairobi, President Kenyatta urged his US counterpart to share experiences and help change the narrative about Kenya and Africa.
“When you go home and as you travel around the world, tell those whom you meet about what you have seen in Kenya. Share your experiences and let them know that Africa is open and ready for business,” President Kenyatta said.
On his part US president Barack Obama urged African countries to tackle corruption issues, as it inhibits business.
“International businesses are concerned if five or ten percent of the cost of investing in Kenya goes somewhere else that has nothing to do with the project – If you have to pay bribes then you inhibit entrepreneurship,” Obama said in a news conference in Statehouse Nairobi.