Africa's foreign direct investment fell to $45 billion in 2022 from $80 billion in 2021.

Egypt's foreign direct investment more than doubled to $11 billion in 2022.

Most foreign direct investment in Africa goes to the energy and infrastructure sectors, mainly in Egypt, South Africa, and Nigeria.

The African Continental Free Trade Area (AfCFTA) is expected to create a $6.7 trillion market of 1.7 billion people by 2030.

Four high-potential sectors for investment in Africa are automotive, agriculture, pharmaceuticals, and transport, expected to see rapid growth under AfCFTA.

Private equity and venture capital investments in Africa reached a 5-year high of $7.70 billion in 2022, up 66% year-over-year.

Venture capital investment in Africa's health and technology sectors has grown around 10x in the last five years.

Agriculture in Ghana and Nigeria is the most promising sector for foreign direct investment in Africa.

The UAE aims to boost economic cooperation with Africa, particularly in renewable energy, agriculture, and logistics.

North Africa has a diverse and promising services sector, an abundant workforce, and a large youth population, attracting international investors.

Zambia has a highly open trade environment, being a member of SADC and COMESA, with one of the region's lowest profit taxes.

The Zambian government offers incentives to foreign direct investment, including dividend exemptions for five years and a 10% allowance on industrial building construction costs.

Google will invest $1 billion in Africa's digital transformation, focusing on Kenya and Nigeria.

Mauritius, Senegal, and Rwanda are creating SEZs to build infrastructure, establish a stable legal framework, and attract skilled labor.

Mauritius is the top-ranked economy in sub-Saharan Africa, offering a sound environment that encourages investment.

Africa's private wealth is expected to rise to $3 trillion by 2031 from $2.1 trillion currently.

The Agility Company has invested in Ghana and built Egypt's largest Amazon w

Africa's foreign direct investment fell to $45 billion in 2022 from $80 billion in 2021.

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Content: Chairman of the Board of Directors and Editors
I'm sorry.
Mohamad Elbaz
Chairman of the Board of Directors and Editors
I'm sorry.
Mohamad Elbaz
It has reached $11 billion.
UN highlights doubling of foreign direct investment in Egypt
The United Nations Trade and Development Board (UNCTAD) said in its annual report on foreign direct investment flows for the year 2022, on Wednesday in Geneva, that Egypt witnessed an increase in foreign direct investment more than doubled to $11 billion as a result of increased cross-border M & A sales.
Investment flows to Africa fell to $45 billion in 2022 from a record $80 billion in 2021 and accounted for 3.5 percent of global foreign direct investment, the report said, adding that international project financing deals targeting Africa showed a 47 percent drop in value.
The report pointed out that the number of announcements of new projects increased by 39% to 766, and that six of the 15 largest new investment mega projects (those worth more than $10 billion) announced in 2022 were in Africa, stressing that Egypt witnessed an increase in foreign direct investment more than doubled to $11 billion as a result of increased cross-border M & A sales.
The number of new projects has more than doubled to 161, and the value of international project financing transactions has increased by two-thirds to $24 billion.
FDI inflows have risen over the past five years in four of the continent ’ s regional economic groupings, with FDI in the Common Market for Eastern and Southern Africa (COMESA) growing by 14% to $22 billion, and inflows also rising in the Southern African Development Community (SADC) (quadrupled to $10 billion) and the West African Economic and Monetary Union (WEMU) (doubled to $5.2 billion). East African Community (up 9% to $3.8 billion).
According to the report, the largest increase in 2022 was in new field projects announced in energy and gas supply (to $120 billion from $24 billion in 2021), and the value of projects in construction and extractive industries rose to $24 billion and $21 billion, respectively, while the information and communication sector recorded the largest number of projects.
European investors remain by far the largest owners of FDI in Africa, led by the United Kingdom ($60 billion), France ($54 billion) and the Netherlands ($54 billion).

What was the total FDI inflow to Africa in 2022 and how did it compare to 2021?

$45 billion, which was down from $80 billion in 2021

Egypt's foreign direct investment more than doubled to $11 billion in 2022.

Which African countries are driving the venture capital ecosystem?

Most foreign direct investment in Africa goes to the energy and infrastructure sectors, mainly in Egypt, South Africa, and Nigeria.

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Content: (Bloomberg) -- When Africa last played host to the International Monetary Fund and World Bank’s annual meetings in 1973, then Bank President Robert McNamara urged rich nations to show more generosity toward the poor.

A lot has changed since that gathering in Nairobi, but the region still desperately needs investment to defeat poverty and face the climate crisis. Renewed great power rivalry pitting the US-led West against China and Russia is ramping up pressure on the two Washington-based institutions to do more on the continent.

China’s lending to Africa has increased fivefold since 2010, analysis by Bloomberg Economics shows. The World Bank’s funding, by contrast, has grown roughly 2-1/2 times, and the region now faces a worsening funding squeeze amid rising interest rates and weakening currencies.

The continent’s miserly share of the global economy has barely budged since 1973 and African leaders complain they’re overlooked. But don’t ask them to choose between East or West — they want more investment from both.

“The choice is not about whether we’re picking friends and foes,” said Vera Songwe, the former Executive Secretary of the United Nations Economic Commission for Africa. “The choice should be about picking interests that will advance the objectives and interests of the continent.”

Songwe, now a senior fellow at the Brookings Institution in Washington and chair of the Liquidity and Sustainability Facility, says Africa should avoid involvement in any new “Cold-War” competition between the US and China, echoing many of the region’s leaders.

The determination to go ahead with the October annual meetings in Marrakech, Morocco, after an earthquake in mountains above the city last month killed nearly 3,000 is meant to signal the IMF and World Bank’s relevance to the region.

The need for such outreach was made clear when major emerging market powers gathered in August for the BRICS summit in Johannesburg, decrying the Western-led order and broadening their ranks to include Iran and Saudi Arabia. That meeting came a few weeks after Russian President Vladimir Putin hosted African leaders in St. Petersburg.

“What should be announced at least in Marrakech is boosting Africa’s representation within the governing bodies of the IMF and the World Bank,” Morocco’s central bank Chief Abdellatif Jouahri told reporters on Sept. 26.

The meetings are now also taking place against a backdrop of violence that has killed hundreds of Israelis and Palestinians, after Hamas attacked Israel from the Gaza Strip. Morocco has called for an emergency ministerial meeting of the Arab League Council to discuss the situation.

A key theme at the meetings will be the push to expand the World Bank’s resources to provide concessional credit on a much greater scale.

Boosting the ability to provide cheap finance is vital to defeat poverty, confront the climate crisis and deliver the development that the region’s youth demand. Failure to do so risks decades more stagnation and the type of anger that fomented coups in Niger and Gabon in recent months.

“We cannot have a prosperous world unless we also have stable and prosperous Africa,” IMF Managing Director Kristalina Georgieva told Bloomberg in an Oct. 3 interview.

The Biden administration has requested $2.25 billion for World Bank funding from Congress, which Treasury officials say could help “unlock” up to $25 billion in additional lending. And if other rich countries follow suit, the total effort, including private capital, could reach $100 billion.

But the region has already been looking elsewhere. Bloomberg Economics’ analysis shows China now holds about 10% of sub-Saharan Africa’s foreign debt, up from 1% two decades earlier, though its new lending to developing countries has also slowed substantially since 2020.

Even so, the scale of financing required is multiple times more than Africa has been able to attract from both sides combined.

An influential July report co-lead by former US Treasury Secretary Lawrence Summers, to which Songwe was a contributor, sees $3 trillion needed per year by 2030 for developing countries , including $500 billion from international development lenders.

“If you just catalogue all the needs these countries have it’s massive,” said Andrew Dabalen, World Bank chief economist for Africa. “But the key thing is the financing has to be cheap and they have to be transparent about what it is they are actually borrowing for.”

The Washington-based lenders’ inability to deliver anything like the funding needed by the continent is driving pressure for reform.

“The report card on the Fund and the Bank is at best mixed,” said Mavis Owusu-Gyamfi, Executive Vice President at the African Center for Economic Transformation in Accra, who cited their emergency aid during the pandemic as a clear win. “We’ve seen some successes and some great initiatives, and we’ve also seen some failures.”

On the fringes of the Nubian desert in Egypt, the Benban solar power project is a showcase for what can be achieved when development lenders get it right. The World Bank supported construction of the project, which attracted $2 billion in foreign direct investment.

With a current capacity of 1.465 gigawatts — enough to power more than a million homes — Benban has helped Egypt ease electricity shortages and scale back its use of fossil fuels. It’s also created an estimated 18,000 jobs in the north African nation.

“It totally changed our lives," says engineer Ahmed Atef. “Many of the people never had steady employment before the project.”

But other projects didn’t deliver. The World Bank suspended its funding for a Chad-Cameroon oil pipeline in 2006, for instance, after Chad broke its promise to use the income for development and some of the money went to the military instead.

Harsh structural adjustment programs imposed on troubled African economies as the price of borrowing from the Bank and Fund are also remembered with bitterness across the region.

The institutions are now being urged to be more nimble while also granting African nations direct input into the decisions, so that they reflect an African reality. This includes abandoning the tradition where a European leads the IMF and a US citizen is at the helm of the Bank.

“When Africa has a position, it has to start a whole global advocacy campaign to get anybody to listen to us,” said Owusu-Gyamfi. “It’s a bit tiring.”

Half a century has gone by since McNamara challenged the West — in a voice cracking with audible emotion — not to “turn away in cynicism and indifference.” That was music to the ears of Daniel Ritchie, a junior World Bank loan officer at the time, who was at the meeting because he’d learned Swahili as a Peace Corp volunteer in Kenya in the 1960s.

“It was a pioneering move,” said Ritchie, who retired in 1998 and still lives in Washington. “I didn’t realize it at the time, but 50 years later the World Bank is still talking about poverty.”

Indeed, the issue was foremost in remarks by new World Bank President Ajay Banga at the Group of 20 leaders summit in New Delhi last month. “We face declining progress in our fight against poverty, an existential climate crisis, food insecurity, fragility, a fledgling pandemic recovery, widening disparity, and a crippling war on the borders of Europe,” Banga said.

Certain gauges have improved:  Life expectancy in Africa has increased from 46 in 1973 to 60, according to World Bank data, while infant mortality rates have fallen sharply.

Africa’s poverty headcount ratio, or the share of the population living on less than $2.15 a day, has declined from around 56% at the turn of the century to 35%. But the same metric in South Asia has fallen from almost 40% to around 10% over a similar period.

Some of the things that went wrong for Africa — including the pandemic and global inflation — are not its fault. But poor decisions when money was flowing in when commodity prices were high, and gorging on cheap borrowing that become unsustainably expensive amid raising interest rates, are home-grown problems.

Zambia and Ghana have both received emergency bailouts from the IMF this year after defaulting. Many others face debt distress and are shut out of capital markets.

Andrews Kwame Pianim, a Ghanaian economist who attended the annual meetings in Washington in 1971, recalled the optimism of the era and how the hope faded in the ensuing half century.

“We thought we had the answers: As long as countries just followed the rules things would go the right way. Of course, we didn't have the answers,” he said. “Africans must do the work of economic growth and not expect the IMF and World Bank to do it.”

--With assistance from Yinka Ibukun, Souhail Karam and Antony Sguazzin.

©2023 Bloomberg L.P.

The African Continental Free Trade Area (AfCFTA) is expected to create a $6.7 trillion market of 1.7 billion people by 2030.

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Content: South Africa supports calls for global co-operation to boost trade and address economic challenges and climate change

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Johannesburg, South Africa – 23 January 2023: The 53rd Annual Meeting of the World Economic Forum (WEF) in Davos, Switzerland, concluded on Friday, 20 January 2023. World leaders and corporate executives expressed hope that the looming recession facing the global economy could be avoided if countries collaborated to boost global trade and investment.

A high-level South African government and business delegation has returned home from the meeting more upbeat than before that the current economic slowdown and rising inflation could be resolved if nations addressed global supply disruptions that are leading to commodity shortages and driving up energy and food prices.

The delegation was led by Minister of Finance, Enoch Godongwana, who was accompanied by leaders of South Africa’s major corporations operating in various sectors of the economy. The delegation also included Minister of Trade, Industry and Competition, Ebrahim Patel; Minister of International Relations and Cooperation, Naledi Pandor; and Minister of Human Settlements, Mmamoloko Kubayi.

This year’s WEF Annual Meeting was held under the theme “Cooperation in a Fragmented World” and covered many interconnected topics including the impact of the ongoing Russia-Ukraine war on the commodity markets, skyrocketing cost of living caused by rising inflation and monetary policy tightening by central banks, climate change, and the growing impact of artificial intelligence (AI) on workplaces and labour markets.

“The South African delegation did a fantastic job in Davos where it sold our country to global investors as a favourable market to do business and invest in. Notwithstanding the energy supply constraints that our country is currently grappling with, South Africa remains an attractive investment destination given its excellent infrastructure, sophisticated financial markets, and a skilled workforce,” says Sithembile Ntombela, Acting CEO of Brand South Africa.

The South African government is currently implementing structural reforms that have opened the energy sector to private investment to boost energy generation and bring an end to load-shedding that is constraining the economy.

“The structural reforms that are currently being implemented by the government are making progress in removing investment bottlenecks and reducing the cost of doing business. These reforms will enable South Africa, a preferred destination by local investors and global multinationals looking to expand across Africa, to take advantage of the opportunities presented by the African Continental Free Trade Area (AfCFTA),” says Ntombela.

The AfCFTA, which officially launched in 2021, will create the world’s largest free trade area, stimulate intra-African trade, develop regional value chains, and promote industrialisation across the continent.

The AfCFTA Secretariat and WEF revealed in a report unveiled at this year’s Davos meeting that AfCFTA is projected to create single market that will grow to 1.7 billion people and $6.7 trillion in consumer and business spending by 2030.

By 2050, the continent is estimated to be home to 2.5 billion people and a market with a combined business and consumer spending of $16.12 trillion.

The report titled “A New Era for Global Business and Investment in Africa” lists four high-potential sectors that hold lucrative opportunities for companies looking to invest in Africa.

These sectors are automotive, agriculture and agro-processing, pharmaceuticals, and transport and logistics, which are all expected to see rapid growth in terms of production and trade volumes under AfCFTA.

“Given that South Africa is the most industrialised and sophisticated economy in Africa, it is well positioned to take advantage of opportunities presented by AfCFTA. The development of the free trade area will require massive investment in logistics and telecommunications infrastructure to reduce the cost of doing business and enable free movement of people, goods and services,” explains Ntombela.

With the green energy transition and digital transition in full motion around the world, the delegation that represented South Africa at WEF2023 expressed support for calls to reskill and upskill workforces, particularly the youth, to prepare them for future workplaces and to mitigate job losses.

The delegation is impressed by the progress made by the WEF’s Reskilling Revolution; an initiative launched in 2020 to empower 1 billion people. So far, the initiative has reached 350 million people.

Climate change also took centre stage at WEF with world leaders and business executives committing themselves to supporting the implementation of the Paris Agreement, which calls on all countries to cut carbon emissions to limit global warming to around 1.5 degrees celsius and strive towards attaining net zero emissions by 2050.

This commitment requires countries and businesses to move away from using fossil fuel energy sources like coal and crude oil and adopting clean and environmentally friendly energy sources such as wind and solar power.

The launch of the new Coalition of Trade Ministers on Climate, which brings together over 50 countries, was also a highlight of this year’s  WEF annual meeting.

The coalition aims to tackle climate change by promoting trade and investment that encourages adoption of goods, services, and technologies that mitigate climate change in both developed and developing countries.

“However, the global challenges that were highlighted at WEF 2023 cannot be resolved in a fragmented world in which countries are pulling in different directions. These challenges require collaboration and unity by the nations of the world, where counties are working together to find solutions in an integrated global economy,” concludes Ntombela.

Ends/////

Issued by Brand South Africa

Notes to the Editor

Contact: Phindi Mathebula

Email:phindilem@brandsouthafrica.com

Mobile number: +27 64 890 7414

About Brand South Africa

Brand South Africa is the official marketing agency of South Africa, with a mandate to build the country’s brand reputation, to improve its global competitiveness. Its aim is also to build pride and patriotism among South Africans, to contribute to social cohesion and nation brand ambassadorship.

This electronic communication and the attached file(s) are subject to a disclaimer which can be viewed at https://www.brandsouthafrica.com/terms-and-conditions . If you are unable to view the disclaimer, please email info@brandsouthafrica.com for a copy.

Four high-potential sectors for investment in Africa are automotive, agriculture, pharmaceuticals, and transport, expected to see rapid growth under AfCFTA.

Private equity and venture capital investments in Africa reached a 5-year high of $7.70 billion in 2022, up 66% year-over-year.

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African private equity activity surges to 5-year high in 2022

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African private equity activity surges to 5-year high in 2022

Private equity and venture capital investments in Africa soared 66% year over year in 2022 to $7.70 billion, the highest aggregate value for the region in the last five years, S&P Global Market Intelligence data shows.

The massive jump was mainly due to the proposed acquisition of hospital operator Mediclinic International PLC, which is valued at more than $5 billion.

Transaction volume, which includes M&A and rounds of funding, has steadily climbed in the region since 2018 and reached 404 deals in 2022. The continent saw a full-year increase in transaction volume even as activity slowed sharply in the final quarter of the year.

Investments with private equity involvement totaled $370 million in the fourth quarter of 2022, down 71% from $1.28 billion in the prior-year period. Deal volume declined 43% over the same time frame.

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Attractive valuations, young demographics

African technology companies offer appealing entry valuations and high growth rates of about 100% annually compared to peers in the U.S., according to Fope Adelowo, principal at Helios Investment Partners LLP, which invests in telecommunications, media and financial services across the region.

"The growth outlook for those sectors are not only quite positive, but they are also, in many ways, noncyclical," Adelowo said. "When you look at the global environment, whether that's people using more digital methods to make payments ... consumers consuming more data, we're really just in the early stages."

African economies are also buoyed by young populations that are "increasingly entrepreneurial and driven by technology-led innovation," Adelowo said. Money moved into venture capital in the region has grown about 10x in the last five years, largely due to that young population, which is "very digitally engaged." That is helping drive innovation to address inefficiencies in many sectors in Africa, Adelowo added.

Health, tech sectors drawing interest

Once the multibillion-dollar deal for Mediclinic closes, that transaction will become the largest private equity capital deployment in Africa in the last three years. Mediclinic's buyers include Remgro Ltd. and SAS Shipping Agencies Services SÀRL. The deal is expected to close in the first quarter.

The technology sector, particularly digital infrastructure, is also attracting investor interest, Adelowo said. There is an imbalance in the supply of data centers, for example, compared to growth expected from consumers that need more data and are spending more time online.

Africa's financial services and fintech sectors are also expected to continue to grow as many African countries increasingly move to a cashless society, Adelowo added.

What trends are emerging for African startups in 2022?

Venture capital investment in Africa's health and technology sectors has grown around 10x in the last five years.

What trends are emerging for African startups in 2022?

Agriculture in Ghana and Nigeria is the most promising sector for foreign direct investment in Africa.

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Content: The countdown to Expo 2020 Dubai
Dubai Chamber to host African Business Forum at Expo 2020 Dubai
A survey conducted by the Dubai Chamber with participants in previous sessions of the World Africa Business Forum, including dignitaries, investors, trade and investment leaders and experts, revealed that agriculture is the most promising area for investment in the African continent.
During the questionnaire, the participants ’ ideas, attitudes and views on the various aspects of investment and its prospects in the continent were identified.
He concluded that cash investment is the preferred form of FDI, and that Ghana and Nigeria are the preferred destinations for investment in the African continent, due to growth potential and investment opportunities.
The results of the survey provide important data for participants in the sixth edition of the forum, which will be organized by the Dubai Chamber and Expo 2020 Dubai during the exhibition from 13 to 14 October.
This year ’ s edition of the Forum will be organized under the theme “Trade Leads the Future of Economic Transformations ”, which is characterized by radical and fundamental changes that keep pace with the current stage, and at the same time reflects the keenness of the Chamber to achieve a qualitative shift in form and content, which enhances the Forum ’ s status and leading role in publicizing the commercial opportunities available in Africa.
Dubai Chamber, the official business integration partner of Expo 2020 Dubai, will play a pivotal role in stimulating partnerships with the global business community during the six months of the event.
The Forum ’ s program consists of three sections: the Forum ’ s Insights program, the Global Africa Business Forum ’ s networking program, which specializes in bilateral business meetings between investors and businessmen and investors from both sides to discuss opportunities for cooperation and potential partnerships, and the Expert Center, which provides a fast and reliable investment information platform on African countries.
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The UAE aims to boost economic cooperation with Africa, particularly in renewable energy, agriculture, and logistics.

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Content: 00: 00
Expo 2020 Dubai Today
UAE seeks to boost investment flow with African countries at Expo 2020
His Excellency Dr. Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, held a series of meetings with ministers, officials and businessmen from African countries to discuss ways to stimulate trade and investment flows between the UAE and the continent.
During the meetings, Dr. Al Zeyoudi reviewed the economic opportunities and potential of the UAE-Africa partnership in sectors such as renewable energy, agriculture, minerals and logistics.
During the meetings, Dr. Al Zeyoudi briefed the ministers on the developments in the UAE ’ s economic environment during the past phase, including the 50 projects, new economic legislations and qualitative initiatives launched by the UAE to shift to a new economic model based on knowledge and characterized by flexibility, competitiveness and sustainability.
In his meeting with Dr. Chilichi Kabuibwe, Secretary General of the Common Market for Eastern and Southern Africa (COMESA), Al-Zeyoudi pointed to opportunities to increase the current volume of trade exchange between the UAE and the 21 African member countries of COMESA through greater cooperation in areas such as logistics and advanced technology.
In his meeting with H.E. Ntabazi Harriet, Minister of State for Trade of the Republic of Uganda, Thani Al Zeyoudi focused on investment opportunities in agriculture, minerals and retail sectors, and discussed the possibility of investing in irrigation systems and agricultural technology that can enhance the production of key crops such as coffee, cocoa, tea, cotton and flowers.
In a related context, the renewable energy sector, specifically green hydrogen, was the main focus of the discussions that took place during her meeting with Her Excellency Naha Bint Hamdi Ould Meknes, Minister of Trade, Industry, Handicrafts and Tourism of Mauritania, and Her Excellency Lucia Ibombo, Minister of Manufacturing and Trade of Namibia. for production.
H.E. Al Zeyoudi also held constructive talks with H.E. Sikai Nzinza, Minister of Industry and Trade of Zimbabwe; H.E. Carlos Alberto Fortis Mesquita, Minister of Industry and Trade of Mozambique; H.E. Maween Diggs, Minister of Trade and Industry of Liberia; H.E. Thabiso Paul, Minister of Trade and Industry of Lesotho; H.E. Edward Henga Sande, Minister of Trade and Industry of Sierra Leone; H.E. Ndir Nigel Hahel Mead Hassan, Minister of Finance, Economic Planning and Trade of Seychelles, David Osiani, Secretary General of the Ministry of Industrialization, Trade and Enterprise Development of Kenya, and Admaso Tadesse, President of the Trade and Development Bank of Kenya.
H.E. Dr. Thani Al Zeyoudi stressed that Africa is one of the most attractive markets in the world for foreign direct investment, as it enjoys huge investment opportunities in vital and strategic sectors for the UAE such as renewable energy, agriculture and logistics.
He added: “The UAE seeks to strengthen economic, trade and investment cooperation with the African continent, especially as there are common visions between the two sides to achieve sustainable development through future-oriented projects such as green hydrogen, renewable energy and the deployment of agricultural technology solutions, which was highlighted during joint meetings with ministers and senior officials. ”
Al Zeyoudi said: “The UAE continues to implement its ambitious plans to establish itself as a key global gateway for regional and global trade and investment flows. The UAE also provides opportunities for African exporters to access new markets, thanks to its advanced infrastructure linking the country through ports and airports to more than 400 cities around the world, as well as the legislative and regulatory environment that stimulates business and investments. ”
Al-Zeyoudi expressed his aspiration to continue meetings and discussions with ministers and senior officials from African countries to bring trade and investment relations between the UAE and African countries to new heights of growth and prosperity.
His Excellency Thani Al Zeyoudi ’ s series of meetings with ministers and senior officials from Africa are part of the UAE ’ s efforts to expand trade relations with the world, as part of the UAE ’ s ambitious strategy for the next 50 years to build a more dynamic and competitive knowledge-based economy.
Talks have been announced in recent weeks to reach a comprehensive economic partnership agreement between the UAE and Indonesia and India, and a joint statement of intent between the UAE and South Korea on a comprehensive economic partnership agreement between the two countries was announced on Sunday.
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North Africa has a diverse and promising services sector, an abundant workforce, and a large youth population, attracting international investors.

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Content: Report of the American Chambers: Investment interest in the services sector in North Africa
Tuesday ، 28 February 2023 01: 00 AM
American Chamber
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The report of the Council of American Chambers of Commerce in North Africa and the Middle East revealed that the hallmark of the group of North African countries, the abundant workforce, supported by a large number of young people, and the range of jobs requiring high and low skills, pointing out that the service sector in North Africa is diverse and promising, attracting the attention of international and regional investors in sectors such as logistics, maritime services, shipbuilding and most importantly, tourism.
As a result, national governments across North Africa aim to increase their exports regionally and internationally.
The report added that the Middle East and North Africa region has significant natural petroleum resources, which have attracted global capital in oil-related industries, revealing that since November 2022, the region ’ s average oil production has reached about 34.1 million barrels per day, dominated by the Gulf Cooperation Council (GCC) countries.
After decades of focusing on oil products, many Gulf countries are now adopting new export diversification strategies, led by high-tech components, and attracting new investments for unconventional sector projects.
He noted that the Levant countries are a regional home for authentic folklore arts and crafts, and professional talent.
Despite the ongoing political instability in this area, these countries are also involved in agriculture and across different regions.
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What trends are emerging for African startups in 2022?

Which sectors received the most foreign investment?

Zambia has a highly open trade environment, being a member of SADC and COMESA, with one of the region's lowest profit taxes.

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Content: Part I: Attracting Foreign Investment into Africa may not come from the Sweet Stories we tell Foreigners

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By Edward Chisanga

I attended an Investment Forum in Utopia last week where Utopian countries had a rare opportunity to speak their minds out to foreigners who had attended in large numbers together with their Heads of State. The Master of ceremony began by introducing the private sector from rich countries present from France, UK, USA, Germany, Netherlands, and others from the EU membership before turning to the Utopian Heads of State and their groups.

What Foreign Investors Heard

Then he called upon one Utopian Head of State to speak on behalf of all the fifty-five African countries in attendance to list compelling factors that would captivate foreign investors from rich countries to go and invest in Africa.

The President began, “Africa is a huge piece of land, most of which is underutilized. All the countries that I represent here boast of huge land available for you investors. Come and invest in Africa, the continent of the future.” Then the President turned to one of the Presidents in his group and allowed him to speak about his country’s promotion of investment.

“Zambia has one of the most open trade environments in Africa and is a member of the Southern Africa Development Community (SADC) and the Common Markets for Eastern and Southern Africa (COMESA). Businesses in Zambia benefit from one of the lowest profit taxes in the region. Increasing regional cooperation through multilateral organisations, including SADC and the African Union should continue to reduce the likelihood of interstate conflict.” Then he highlighted ‘Some of the government incentives to FDI as:

  1. Dividends paid out on farming profits are exempt for the first five years of activity.
  2. Initial allowance of 10% on capital expenditure incurred on the construction or improvement of an industrial building is deductible.
  3. Foreign exchange losses of a capital nature incurred on borrowings used for the building and construction of an industrial or commercial building are tax deductible.
  4. Income earned by companies in the first year of listing on the Lusaka stock exchange qualifies for a 2% discount on the applicable company tax rate in the particular sector. However, companies with more than 1/3 of their shareholding in the hands of Zambians qualify for a 7% discount.
  5. Implements, machinery and plant used for farming, manufacturing or tourism qualify for wear and tear allowance of 50% of the cost per year in the first two years of activity.

He continued, “Investors who invest at least USD250,000 in any sector or product not provided for as a priority sector or product, is entitled to non-fiscal incentives such as investment guarantees and protection against state nationalization and protection against non-commercial risks (Zambia is a signatory of Multilateral Investment Guarantee Agency).”

Then the moderating African President turned to South Africa’s President and gave him the floor. President Cyril Ramaphosa was quick and went straight to the point by referring his audience to his weekly newsletter output, ‘From the Desk of the President,’ and repeated the points he recently made in the United Kingdom, “Government has a bold vision to be a destination of choice for foreign direct investment and this requires far-reaching reforms. These include reducing the cost of doing business for both large and small businesses, improving the quality of South Africa’s institutions, enhancing administrative efficiency and governance systems.”

When the turn of the Ethiopian Prime Minister came, he repeated what he had said at the 2019 Davos Meeting in Switzerland, “Investment in infrastructure has contributed a lot to the growth and attracted FDI, making Ethiopia one of the leading FDI destinations in Africa.”

Based on what the three African countries presented as their selling points to attract FDI, the President speaking on behalf of Africa retorted, “The three African countries that have just spoken present a strong representative basis for me to conclude that Africa is ripe and ready for FDI. “You have heard yourselves from the horses’ mouths,” He proudly said. “There’re similar incentives in Rwanda, Benin, Lesotho, Burkina Faso and all other countries. It’s time for you to come and invest in Africa.”

What Foreign Investors do not hear.

Despite the repeated sweet stories coming from African leaders, there’re equally important things that Foreign Investor don’t hear but that they are aware of.
About Zambia, an UNCTAD Investment Report reports, “Zambia’s infrastructure, whose poor quality is a barrier to investment, should be strengthened by investments in the road network, railways and the construction of power plants. In 2021, a USD 11 billion standard gauge railway project was announced in Zambia, involving US capital, which would expand essential transport links with the outside world. The regulatory environment does not favour entrepreneurial activity, the requirements for commercial licenses being long and costly, and the application of regulations not being uniform. In addition, the protection of property rights and the enforcement of contracts are still weak by international standards.”

As the author of this article is a Zambian living in Zambia, he is aware of the challenges coming the country’s energy sector. We have loadshedding in Zambia which Foreign Investors are aware of. They’re aware that the Mining sector, the country’s brain earner depends on use of energy, yet it is not exempted from malady of shortages. Equally, they know how much Zambia’s private sector suffers from energy shortage and its effect on business.

In South Africa, despite sweet stories, except only in 2021inward FDI flows have been declining significantly since 2010 as Figure 1 below shows. Even if this dwindling trend were to be attributed to other factors, the deteriorating energy situation in South Africa is playing a multiplier effect on FDI and the overall economy. Yet, South Africa like other African countries’ Heads of State turn a blind eye on the matter. As for many other things going unwell, they simply don’t tell the truth about the energy crisis.

In Ethiopia, Laments Omer Redi, “The crisis in the power supply has reached such a critical point that blackouts now occur every other day.” Fortune adds, “It is obvious that Ethiopia is now in such a serious power crisis that it has been forced to introduce load shedding.” There are other voices no longer silent. Said Kevin Daly of London based investment company, “Ethiopia is uninventable now. The political situation is very tenuous, and there is a lack of information and clarity on the economy, and on how things are going to be resolved.”

Concluding

Policy coherence is defined by the OECD as, “The systematic promotion of mutually reinforcing policy actions across government departments and agencies creating synergies towards achieving the agreed objectives.” The wonderful incentive packages must be complemented with other key inputs to build a whole.

For example, just as a motor vehicle cannot move smoothly if one key part falls off, you cannot attract adequate FDI with a list of incentives only when the energy sector, upon which industry depends is in crisis. Fix energy, infrastructure, human skills, corruption, rule of law, security, etc to arrive at a complete package of what attracts FDI. FDI goes to Asia because there’s no infrastructure, human capital, or energy crisis.

All these are well built. Asia also has bigger land than Africa. We cannot keep on using obsolete factors that are abandoned by others to attract FDI. It’s like always saying, “Come to Zambia and see the Victoria Falls.” Foreign Tourists now go to beautiful cities without dust, simply to visit, feel safe and talk to honest and humble citizens with Asians largely qualifying in almost all these. Our cities, including Livingstone, are not ripe for serious tourism that builds wealth.

Foreign Investors or tourists are not our uncles on whose shoulders we will simply cry and await their positive response. They will not come simply because we are democratic and shout that Zambia is ready for business. They are not cajoled by sympathy or simply because Zambia’s leadership change occurs smoothly. They have not come since change from Kaunda to Chiluba or Chiluba to Banda or Banda to Sata which were all peaceful and democratic. We must understand what their needs are. If we don’t provide, they’ll go to Asia.

The Zambian government offers incentives to foreign direct investment, including dividend exemptions for five years and a 10% allowance on industrial building construction costs.

Google will invest $1 billion in Africa's digital transformation, focusing on Kenya and Nigeria.

Title:

Content: Optimists talk about Africa as the next economic frontier

By 54m ago

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BY DELIA DE VILLIERS

For years Africa has been shrouded in controversy when it comes to its future potential. The optimists talk about Africa as the next economic frontier, while the sceptics point to a low growth rate, poverty and conflict as key challenges standing in the way of notable development.

Yet, the continent has grown its economy by around 5 percent a year over the past decade, is as urbanised as China and has as many cities as Europe with a population of more than one million, according to Future Agenda.

The World Bank reports that sub-Saharan Africa is “home to more than 1 billion people, half of whom will be under 25 years old by 2050”, suggesting that the workforce of the future is based here. They go on to say that Africa is a “diverse continent offering human and natural resources that have the potential to yield inclusive growth and eradicate poverty”.

While potential is not a measure of performance, what is productive is to consider the motivations of businesses opting either to enter the African market or expand operations on the continent. And that’s notwithstanding the challenges, or as Shaw Mabuto, partner at private equity firm Spear Capital, puts it: “While there are undoubtedly risks in Africa, they are well known and understood. Investors can mitigate for them.”

Spear Capital is particularly excited about the opportunities in the ESG (environmental, social, governance) space in Africa. “There are many businesses that have been able to thrive in spite of the prevailing environment and lack of government support. With the right backing, companies across the continent can grow successfully while at the same time making the world a better place and providing returns to their investors,” Mabuto says.

Google’s recent announcement of plans to invest $1 billion (R15.6bn) to support digital transformation in Africa is another very positive indicator of the potential of the continent. The investment, which was announced in October 2021, will be used to enable affordable internet access and building helpful products, for investments in entrepreneurship and technology, as well as to empower businesses as they continue or embark on their digital transformation.

This positive sentiment about Africa’s potential is echoed by a number of businesses who have chosen to expand their operations on the continent.

Picking your next market is key

When SweepSouth decided to scale their business across the African continent in 2020, they chose Kenya as the first territory to launch their on-demand home services model outside of South Africa’s borders. Three months ago they started operations in Nigeria, and plans are now afoot to expand further into Africa.

“There are so many factors that go into choosing a new market, so we decided to look at countries where people experience the same sort of home-care needs South Africans required when SweepSouth was started,” says Aisha Pandor, SweepSouth chief executive.

Kenya and Nigeria were obvious choices, representing big-market regions with a high growth opportunity, ever-increasing internet penetration and digital literacy, and the potential for positive impact on employment, education and economic growth via smart, scalable technology solutions.

“Kenya appealed to us because it felt like an in-between in terms of culture, market segment and dynamics, and also smartphone and internet penetration when compared with West Africa. And Nigeria is a really exciting new venture that we hope will serve as a base for further expansion into the West African region,” says Pandor.

West Africa, too, is increasingly recognised as an area of economic and growth interest for businesses looking to get a foothold on the continent.

Integrated PR and marketing agency Irvine Partners recently opened an office in Ghana in response to an increasing number of their global clients needing support there. The agency already has wholly owned offices in South Africa, Kenya and Nigeria, and has realised the potential of this West African country.

“Most of our clients’ interest in the region stems from Ghana’s position as a tech hub within sub-Saharan Africa and its growing financial services industry, but we’re also seeing many other industries looking to invest in and expand into the country. Strategically, it makes a lot of sense for us to have a presence in the country and we’re optimistic about its potential,” says managing director Hayley van der Woude.

Beyond the obvious

Importantly, the interest in Africa extends beyond the traditionally popular economic areas such as Lagos, Nairobi and Accra, with Mauritius serving as a prime example of potential beyond the obvious. It is currently the top-ranked economy in sub-Saharan Africa, according to the World Bank’s Ease of Doing Index and is recognised for offering a sound political and economic environment that strongly encourages investment thanks to a sophisticated banking system, a favourable tax regime and low inflation.

These are among the main reasons.

The Business Exchange (TBE), a South African-launched serviced office offering, not only expanded operations to Mauritius but also designed an investment opportunity for others with their sectional title shared office investment that offers a safe and affordable way to get into this bustling market.

“Mauritius, in our view, is fast becoming one of the hottest investment hubs on the continent. Major international brands, including Samsung, Broll, Expedia and NBA (North America’s National Basketball Association), are based at our serviced office space there, which speaks to the interest in the location and offers an indication of its dynamism as a business destination,” says David Seinker, the founder and chief executive of TBE.

Embracing innovation

Lastly, but certainly very significantly, when it comes to businesses where customer-centricity is key, such as banking and telecoms, African players compete more effectively than their international counterparts, according to a finding in the Boston Consulting Group’s digital maturity index.

“It’s also hardly surprising that these are two sectors where Africa has led the world when it comes to technology-led innovation,” says Ngadi Job Goshi, the general manager at Liferay Africa. “Ultimately, while Africa may be less digitally mature than other markets, there can be no doubt that businesses on the continent are unafraid to embrace technology and innovation. And, in the customer-centric ways in which they’ve done so, despite facing adversity and strong headwinds, there are lessons for the rest of the world in the tenacity and ingenuity birthed and nurtured in the African soil.”

Delia de Villiers is the senior account manager, Irvine Partners.

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Mauritius, Senegal, and Rwanda are creating SEZs to build infrastructure, establish a stable legal framework, and attract skilled labor.

Title:

Content: Free zones may be Africa’s best chance to accelerate wealth creation

By Sylvia Brune

Co-founder of AHOY – a flight booking and concierge app – Sylvia Brune discusses why free zones may be Africa’s best chance to accelerate wealth.

Given the demand for goods and services from Africa’s growing middle classes, the continent has huge potential for growth. Over the past year, Foreign Direct Investment (FDI) into Africa grew by 11%, bucking the global trend and potentially setting a bright precedent for the future.

Whether this upwards trend in FDI will have a positive effect on growth and wealth creation is, however, still unknown. Studies have shown that capital has little impact on an undeveloped foundation. Key components needed to enhance capital’s productivity are infrastructure (not just physical), a stable and transparent legal framework, and skilled labour.

Where these are lacking, investors into the continent have to first ‘build’ the commercial foundation, before commencing their projects. Like spending money on hiring advisors, lawyers, and accountants to navigate the various countries’ economic environments, political systems, and bureaucracy. This adds time and uncertainty to projects, acting as an effective ‘tax’ on any return on investment - meaning only projects with a very high upside will be embarked upon.

Evidence suggests that these key components are indeed lacking across most of Africa, albeit with a small handful of countries on the road to improvement.

Countries, like Senegal and Côte d'Ivoire, have made important strides to improve anti-corruption institutions. Cabo Verde and Gambia have managed to gain local trust with 85% and 84% believing their government is fundamentally sound. And Mauritius and Rwanda have made it into the top 35 countries in the world as measured by economic and personal freedom, with Mauritius marginally beating Norway in the global ranking.

The reality is, however, that corruption continues to undermine the rule of law across most of Africa (which hosts 13 of the globe’s 20 most corrupt countries). Rule of law relates to strong property rights, government integrity, and judicial effectiveness - the basis for a sound investment environment. What is even worse than corruption’s effect on FDI, though, is its effect on retaining and developing talent.

Instability and lack of opportunity continues to result in brain-drain - drawing talent and skill away from the continent. The World Bank estimates one-in-nine Africans with a tertiary education live away from Africa – a 50% growth since the mid-00s.

So, what’s the solution?

Given the long, tough road ahead towards building economically sound environments across Africa, I believe the only solution in the short run, is establishing 100s of Special Economic Zones (SEZs) throughout the continent.

For those unfamiliar with SEZs, they are areas which operate under a different legal framework to the country they inhabit – with investment-friendly laws around commercial transactions, taxes, and the protection of private property. SEZs’ advantage is that you avoid building on top of broken legacy system, instead creating a pre-packaged, investor-ready climate.

These zones have been successfully tested and run in China and the Four Tigers (Hong Kong, Singapore, South Korea and Taiwan) to attract considerable FDI, and experience decades of double-digit growth. This format could likewise be used to boost and sustain investor interest in Africa.

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SEZs as talent hubs

While SEZs are known mostly as attractive investment environments, with conducive infrastructure and legal frameworks, the secret to their success rate is actually in their ability to attract and retain talent and skilled labour in specialised hubs.

China showed just how powerful an industry focus within SEZs can be. Because they provide a magnetic effect of highly specialised knowledge hubs - comprised of domestic, regional, and international talent.

Capital is like fuel, it’s only effective where there is a flame to throw it on. And that flame is talent.

The potential is clear, and I believe Africa has a burgeoning pool of talent waiting to be tapped into. But whether they are able to put their talents to best use, collaborate, and innovate freely is uncertain, and will determine whether they stay, or search for opportunities elsewhere.

A common hurdle, for example, is work visa rules between African countries, which means it’s easier for talent to find good opportunities outside Africa than within Africa. Talented individuals want to work alongside other talent. Similarly, talent and specialists from outside Africa face considerable barriers when trying to obtain work permits.

For example, Mr. Eazi’s emPawa Masterclass, like many creative undertakings, is dependent on bringing together the best talent. Earlier this year, emPawa struggled to bring artists, producers, and mentors together from across Africa. Due to visa rules and uncertain processing times, some were only provided with visas after the masterclass was already over, some not at all.

Here, again, SEZs are a solution. SEZs are able to receive visa allocations relating to their area of specialisation, which increases the likelihood of collaboration and innovation - which in turn attracts capital.

The Andela example

There’s plenty of evidence that talent wants to stay, provided there are the right conditions to do so. A great example is tech recruitment platform Andela, which proves that when start-ups in Africa have access to the best talent, including a global support network, and then tap into local opportunity, they can raise substantial foreign capital, and the local business community benefits as well.

Andela trains candidates for six months before pairing them with clients, many are the Fortune 500 and a number of Silicon Valley start-ups. So far, more than 90% of Andela’s first batch of alumni are still working in Nigeria.

SEZs would be able to turbocharge the work of companies like Andela. After talent has been developed, they need environments where they can make most use of their skills.

Already, countries like Mauritius, Senegal, and Rwanda have and are in the process of creating SEZs, with the view to building infrastructure, a stable legal framework, and enticing skilled labour – it’s an exciting time and I for one, am eager to see the results as more African countries follow their footsteps.

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Mauritius is the top-ranked economy in sub-Saharan Africa, offering a sound environment that encourages investment.

Africa's private wealth is expected to rise to $3 trillion by 2031 from $2.1 trillion currently.

Title:

Content: Archive / Global News
World Today – Two small countries driving strong growth in Africa ’ s private wealth
You are now following the news of two small countries driving strong growth in Africa's private wealth from the World News section and now we leave you with the full details
MOHAMMED, Abu Dhabi, March 4, 2023 09: 22 PM – Rwanda and Mauritius combined account for less than 5 percent of Nigeria ’ s GDP, but the two small countries are driving strong growth in private wealth in Africa which is expected to rise to $3 trillion by 2031 from the current 2.1 trillion.
According to Henley Global Consulting ’ s Africa Private Wealth Report, Africa ’ s smaller and better-regulated economies are fast becoming centres of wealth and home to more millionaires on the continent.
Private wealth in Mauritius is expected to grow by 80 percent over the next 10 years, compared with 60 percent for Rwanda.
Great for Mauritius.
The number of high net worth individuals in Mauritius will reach more than 8,000 by 2031, making it one of the fastest attracting markets for high net worth individuals in the world, along with Australia, New Zealand, Switzerland and Malta.
In 2022, Mauritius became the first African country in terms of per capita wealth, due to the significant growth in the number of wealthy people who have flocked to it in recent years, taking advantage of the easy environment to do business, with Mauritius ranked 13th globally in the latest World Bank report on the indicators of the business environment; and ranked by the New World Index as the safest country in Africa.
Adult Retreat
As small countries attract more wealth, countries that have historically been the epicenter of private wealth in Africa are experiencing a steady exodus of millionaires.
Over the past 10 years, about 4,500 people with more than $1 million have left South Africa.
Although South Africa remains a major bastion of wealth in Africa, with a strong market for luxury real estate and wealth management services, it has faced significant economic and security challenges in recent years.
Of the 2,668 billionaires in the world, 15 are born in South Africa, but only 5 still live there.
Nigeria, Africa ’ s largest economy, has seen a sharp decline in total wealth, having suffered in recent years from high unemployment, corruption and over-reliance on oil exports.
Positive outlook
The outlook for private wealth on the continent is largely positive, as African countries have become less reliant on extractive industries, and business conditions continue to improve in many countries.
On the other hand, rapid population growth is a magnet for financiers looking for larger consumer markets.
Khaya Munzima, editor-in-chief specializing in economic affairs at the South African Broadcasting Corporation, believes that the continent has a lot of potential that helps to grow private wealth, especially in the central sectors that include agriculture, mining, information and communications technology, real estate and others.
“Africa is the second largest continent in the world with a population of 1.2 billion people, which is important for consumer activities that attract private wealth. ”
“The global economy is so interconnected that it is undeniable that the impact of the Russian conflict in Ukraine has been enormous on Africa, and there is an urgent need to pay more attention to the development of the financial sector, which is a key pillar of private capital. ”
Challenging the business environment
For experts, the African countries best able to improve the business environment will be the most profitable for the most part.
The World Bank estimates that of the 35 least business-friendly countries in the world, 27 are in Africa.
In this context, experts point to several challenges that hinder financial flows to many African countries, including corruption, bribery and extortion, as well as security and political instability.
Investment consultant Khea Sithol says some African countries are treating foreign firms as tools to absorb the crises they face.
“They stalk and blackmail foreign companies when they feel they need more money, hard currency, or more taxes to run parts of the country. ”
The economic system in many African countries poses a real challenge to the wealthy, as the legal framework governing investment relations is linked to the survival or demise of power in a highly volatile political environment.
Important indicators
136,000 people in Africa have assets of more than $1 million, of whom about 7,000 have assets of more than $10 million and 305 have assets of more than $100 million.
21 individuals in Africa have net assets of more than $1 billion, most of whose investments are in real estate, mining, telecommunications, luxury goods trading and agriculture.
39,000 South Africans own $651 billion in South Africa, of which $370 billion is concentrated in Johannesburg and Cape Town, the two richest cities in Africa.
• 27% decline in private wealth in Nigeria over the past 10 years, and 10,000 private Nigerians currently own about $228 billion.
We hope to be able to convey the full details of two small countries that are driving strong growth in Africa ’ s private wealth.
In God ’ s care and protection.
You may also read.

The Agility Company has invested in Ghana and built Egypt's largest Amazon w

Title:

Content: Ghana must bolster investor confidence through strategic actions

0

Mr. Charles Gassoub, West Africa Vice President, Agility Logistic Parks (ALP), says Ghana needs to take radical steps to regain its position as the best investment destination for foreign investors.

He was speaking at a breakfast meeting organized by the Ghana Investment Promotion Centre (GIPC) and added that the country was no longer the top-notch country investors consider when trying to invest.

“Ghana was the priority for most of the customers, but today, Ghana has slowed down for several reasons, and one of the reasons is that the rest of the African regions are trying to catch up with Ghana,” he stated.

Mr. Gassoub explained that this was partly due to the fact that most of the regions in Africa that were imitating Ghana were now taking steps to catch up with the country, hence the need to be innovative enough for the country to go back to its original state.

He said the country was then the friendliest in terms of business, strategically positioned in the middle of West Africa, coupled with secured political stability, which lured most investors to reach out to the country to invest.

He mentioned that the conducive atmosphere in Ghana was one of the reasons why the Agility Company ventured into the country for business before targeting other African countries.

He added that the company, since its inception, had been mentoring and training some businesses in Africa to meet international standards for businesses since most investors were quite skeptical about meeting the right people for investment.

The West Africa Director, ALP, said the Agility company funds and builds to the customer’s specifications, where the price would be incorporated into a lease of about ten to 15 years. “In a way, we’ll be acting like a bank with no interest.”

He said the company had built the biggest Amazon warehouse in Egypt, stressing that technology was also expanding and changing the dynamics of wholesale and retail business, and cautioning that it was about time Africans put things into perspective for the development of the continent.

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What trends are emerging for African startups in 2022?

Which African countries are driving the venture capital ecosystem?

Which countries are preferred FDI destinations in Africa?