Significant growth for African businesses in 2010 - africapractice
100% of respondents said that they anticipate levels of foreign direct investment to rise in 2010, the majority expected to come from China. This represents a much-improved outlook when compared to last year's survey, in which 69% of respondents predicted a reduction in FDI flows.
When asked what they thought would be the biggest challenges to their business in 2010, executives were split between access to credit and availability of talent, which received 35% and 30% of votes respectively. This echoes last year's survey in which 31% of respondents cited talent as the biggest concern. Physical infrastructure and legislative environments were also cited as potential growth limitations.
The future role of the United States prompted a mixed reaction, with only 17% of business leaders expecting the Obama administration to have a positive influence on Africa.
However, there is a consensus of optimism surrounding the impact of the 2010 FIFA World Cup, although most (54%) believe that benefits will be felt only in South Africa itself.
The majority of respondents cited advancements in technological infrastructure as being more significant for business opportunity than politics, thus reaffirming the common assertion that ICTs are key enablers of productive business.
Increased intra-African business and moving away from a reliance on international exports was cited as key in Africa's private sector development with Alasdair Munn, Director of Rebuild Zimbabwe commenting, “The biggest market for Africa is Africa herself. Growth in private investment and empowering communities has greater potential for Africa than just exports.”
Marcus Courage, managing director of africapractice said, “It is fantastic to hear business leaders speaking so positively about Africa again, with so many expecting their businesses to grow significantly in 2010. However, finding talent and access to credit are recurring challenges, which should act as a clarion call to both government and the private sector about where investment needs to be made, in order to facilitate and encourage further growth.”
Summary of survey results:
What will be your company's biggest challenge in 2010?
Talent— 35%
Credit - 30%
Infrastructure— 9%
Political instability—5%
Political / legal infrastructure - 5%
Crime / Security—0%
Other — 16%
What investment plans does your company have in 2010?
Expand significantly - 68%
Expand slightly - 27%
Maintain existing business levels - 5%
Reduce slightly - 0%
Reduce significantly - 0%
Do you expect Foreign Direct Investment (FDI) in Africa to grow in 2009?
Yes, with the greatest proportion coming from China - 83%
Yes, with the greatest proportion coming from Europe - 11%
Yes, with the greatest proportion coming from Asia excl China - 3%
Yes, with the greatest proportion coming from Latin America - 0%
Yes, with the greatest proportion coming from other African nations - 0%
No, FDI flows will reduce slightly - 3%
No, FDI will reduce significantly - 0%
Do you think the FIFA World Cup 2010 is going to benefit the continent?
Yes, but only in South Africa - 54%
Yes, we should see increased investment in a number of countries - 27%
No, I don't think Africa has taken advantage of business opportunity -19%
Do you think the new US administration will have a positive impact on Africa?
No, nothing will change the US isn't interested enough - 33%
Yes, Obama has big plans for Africa - 17%
No, nothing will change as US has little influence - 17%
Other - 33%
What are the most significant developments that you can foresee next year in Africa, aside from FIFA World Cup?
Elections in Central African Republic, Ethiopia, Guinea, Sudan, Tanzania - 8%
Technology investments, improving quality and reducing cost of communication -56%
EAC Customs Union coming into force - 16%
Other - 19%
