Confidence in the Continent: Research with Opinion Leaders on Investment Sentiments in Africa

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FTI Consulting’s third annual survey ahead of the World Economic Forum’s 2016 African summit builds on the findings of previous years, examining the ways in which opinion leaders perceive general risk and appetite for investment in the continent and discusses the drivers and sectors for continued commitment and development.

Key results

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Overall, while the international business community still displays appetite for exploring business opportunities in Africa, perceptions of risks have grown by 10% in one year, and the essentiality of Africa in strategic growth has declined by one third.


The top three barriers perceived as holding back the international community from considering Africa as essential to strategic growth [political instability (61%), red tape and bureaucracy (57%), risks of breaching bribery and corruption regulations (56%)] may be directly influenced by regional authorities and national governments’ ability to develop and maintain good governance, with security and terrorist threats ranked closely behind; 51% of respondents rating these as obstacles to developing their footprint in African markets. However, while Africa is not immune to the global issues of security and macro-economic uncertainty, there is an emerging trust in its business community, with two thirds of respondents identifying African business leaders as the most effective at encouraging the right sort of investments into Africa to help boost the economy and benefit to society. Concurrent with our 2015 results, respondents have reiterated that businesses need to become more effective communicators and that African governments should be more realistic about what investments can achieve.

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Investors’ Role in Communicating Effectively

While the contributions that companies operating in Africa can and should make is universally recognised, an overwhelming majority of respondents suggested that there are significant gaps between what is being effectively communicated and what needs to be clearly conveyed. This provides a sense that, while businesses may be active in fulfilling their own corporate and social responsibilities, they can play a more engaged role in public debate on broader socio-economic issues.

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This demand for a strengthened corporate citizenship extends further, for example with 80% of respondents indicating that companies should be more effectively encouraging government spending outside of their sector to lift living standards.



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A form of ‘business advocacy’ is identified as a desirable leadership role, with 97% of respondents stating that business leaders should be personally more involved in public discussions on issues that relate to investing in Africa.




The Sectors Attractive to Investors?

The commodities boom may be over, but sub-Saharan Africa is still experiencing growth, a remarkable fact considering that the continent is a net exporter of primary commodities.

The ability of African markets to innovate and to ‘leapfrog’ key technologies is evidenced in more than half of respondents considering investing in next generation communications infrastructure to have increased over the past 12 months, closely followed by traditional infrastructure. Much of this (48%) is understood to have been driven by Public-Private Partnerships (PPPs), compared to Joint Ventures(34%) and greenfield investment (28%). Looking ahead, this trend looks set to continue, with expectations that investments in the communications sector alone will continue to increase by volume more than 80% year-on-year (2015 to 2016). By adopting sound macroeconomic policies over the past two decades and sector reforms, many African economies have already shown that they can sustain a trajectory of economic growth and beat the ‘resource curse’.

According to the World Economic Forum, “Low global prices for major commodity exports, currency devaluations and debt sustainability considerations, as well as geosecurity threats that have weakened growth in some countries underscore the urgent need for economic diversification for sustained inclusive growth. In this context, Africa’s leaders need to pursue new approaches to ignite structural transformation, particularly in the face of rapid technological changes that have the potential to create new industries and reduce inequality.”

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Speculative analysis may suggest that the winning bets are those which are less capital-intensive and which yield faster returns on investment




Which Sectors in Africa Need to Attract Investment?

The top five priority areas for investment include: agriculture, renewable energies, energy and utilities in general, banking and finance, and telecommunications. Of all essential ingredients for growth and economic development, our respondents identify not just the need but the appetite for these sectors to attract investment. The challenge will be meeting both domestic and international demand and ensuring equitable distribution of the benefits.

In 2013, Makhtar Diop, World Bank Vice President for Africa , said, “We cannot overstate the importance of agriculture to Africa’s determination to maintain and boost its high growth rates, create more jobs, significantly reduce poverty, and grow enough cheap, nutritious food to feed its families, export its surplus crops, while safeguarding the continent’s environment.”

A lack of available finance continues to be a key constraint for Africa but 2016 will see significant investments as big finance moves to tap the potential
of the unbanked. According to Caroline Kende Robb, Executive Director of the Africa Progress Panel, “Mobile technology is becoming pivotal in addressing the needs of the 80 per cent of citizens who are excluded from the financial system. Local banks must now begin to function more as “real” banks to serve the demands of small and medium-sized enterprises, many of which are run by dynamic “agropreneurs.”

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Please click here to read the full report.

Quantitative Survey
This research was conducted online by FTI Consulting’s Strategy and Consulting team from April 6th – April 25th 2016 on n=87 opinion leaders on Africa

More information on the results and methodology can be obtained by emailing:

Note: As a consequence of rounding up percentage results, the answers to some questions might not always add up to 100%.

Dan Healy is  Managing Director of Strategy Consulting & Research EMEA at FTI Consulting UK.

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