Ernst & Young's 2011 Africa Attractiveness Survey

Overview

It's time for Africa. While Africa’s challenges are well documented, there is an increasing recognition that the continent is on an upward trajectory; economically, politically and socially.

The African growth story is underpinned by a longer-term process of economic and regulatory reform that has occurred across much of the continent since the end of the Cold War; a period during which inflation has been brought under control, foreign debt and budget
deficits reduced, state-owned enterprises privatized, regulatory and legal systems strengthened, and many African economies opened up to international trade and investment.

Widespread reform has resulted in an ever improving business environment, and this, together with other factors, such as the commodities boom and increasing infrastructure investment, has contributed to a doubling of economic output over the past decade.
During this period, a number of African economies have recorded impressive growth rates. For example, African economies were among the 10 fastest-growing economies in the world in the period 2001-2010, according to The Economist.

African economies proved resilient through the global financial crisis, with the sub-Saharan region, for example, rebounding very strongly from a slight dip in 2009 to grow, according to the International Monetary Fund (IMF) forecasts, by 5pc in 2010, 5.5pc in 2011 and 6pc in 2012.

In addition to fundamental economic and regulatory reforms, there have also been significant advancements in human development and governance indicators, with the Ibrahim Index of African Governance, for example, showing steady progress. African society is also becoming wealthier with greater spending power. A growing middle class, together with technological and communications advancements, is also giving rise to an increasingly active civil society that is demanding a participatory voice and accountability from its politicians. Population growth is resulting in a flood of new entrants into the labor market, increasing social pressures but also
founding the base for a new consumer market. Even more crucially, while Africa's rich endowment in natural resources has played an
important role in its economic development, many economies are diversifying away from an overdependence on extractive industries.

We believe that foreign direct investment (FDI) can play a critical role in helping to accelerate and sustain growth and development across the continent.