The next few years will be tough – partly, even largely, as a result of a fragile global economy – but many African economies remain resilient, with two-thirds of Sub-Saharan African (SSA) economies still growing at rates above the global average this year.
From an investment perspective, the next few years may be challenging – this is not because the opportunities are no longer there, but rather because these opportunities are likely to be more uneven than they have been. It is now more important than ever for organizations and investors, who sometimes place too great an emphasis on shorter term economic growth trends, to adopt a granular, fact-based approach to assessing investment and business opportunities for the long-term.
Given the scale, complexity and fragmented nature of the African continent, making well-informed choices about which markets to enter when and via which mode will be more critical than ever. A country’s macroeconomic resilience is also only one of several factors that investors and organizations need to consider when conducting this kind of analysis.
To support investors in adapting to a more uncertain environment and to assess variable opportunities and risks across the continent, EY has developed a tool that provides a balanced set of shorter and longer term focused metrics. The Africa Attractiveness Index (AAI) – helps to measure both likely resilience in the face of current macroeconomic pressures, as well as progress being made in critical areas of longer-term development, namely governance, diversification, infrastructure, business enablement and human development.
Read the full report below
Economic growth across many (but not all) African economies will remain slower over the next few years.
Nevertheless, despite current uncertainties, longer term prospects for growth and investment remain positive.
Most African economies are in a fundamentally better place today than they were 15 years ago, and overall growth will remain robust relative to most other regions in the world.
Supporting our longer term outlook is the fact that FDI levels into Africa remained relatively strong in 2015 (with a 7% year-on-year increase in FDI project numbers).
However, in a context of uncertainty, the opportunities for growth & investment are a lot more uneven than they have been; making investment choices based on fact-based analysis are more important than ever.
To support clients in this process EY has introduced a tool – the Africa Attractiveness Index – which ranks countries based on a balanced set of shorter- and longer-term focused metrics (helping to put some of the current ‘noise’ regarding economic performance of some of these economies into a proper context).
We are at an inflection point in terms of the structural evolution of most African economies. Decisions made and actions taken now will determine, which of these economies consolidate the gains made over the past decade as a platform for sustainable growth in coming decades.
Unable to view the “Africa Attractiveness Program 2016 – Navigating Africa’s Current Uncertainties: EY” report below? Download it here
Africa Attractiveness Program 2016 – Navigating Africa’s Current Uncertainties: EY
Unable to view the “Africa Attractiveness Program 2016 – Staying the Course: EY” report below? Download it here
Africa Attractiveness Program 2016 – Staying the Course: EY
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