EY regular presentation · 2015. 6. 2. · market efficiency Labor market efficiency Financial...
Transcript of EY regular presentation · 2015. 6. 2. · market efficiency Labor market efficiency Financial...
Making choices
EY’s attractiveness survey
Africa 2015
Page 2
Africa attractiveness surveys Background
EY’s 2015 Africa attractiveness survey
Using these
qualitative and
quantitative inputs,
we continue to
develop insights and
shape viewpoints in
support of increased
investment into Africa
Fifth annual Africa
attractiveness survey
Analysis of greenfield and
brownfield foreign
direct investment
(FDI) project flows
into Africa for various
periods, going back
as far as 2003
Survey of
over 500 business
leaders and
investors from 30
countries to
ascertain the
perceived
attractiveness
of Africa as an
investment
destination
Page 3
Africa attractiveness surveys 2011-2015
EY’s 2015 Africa attractiveness survey
It’s time
for Africa
Building
bridges
Getting down
to business
Executing
growth
Making
choices
2011 2012 2013 2014 2015
Page 4
2014: The headlines Perspective remains important
EY’s 2015 Africa attractiveness survey
► Africa received the second most FDI
capital in the world, registering year-on-
year growth of 136%
► SSA will be the second-fastest-growing region in the world this year, with 22
economies growing at 5%+
► Successful Nigerian elections an
important symbol of the ongoing process
of democratization in Africa
► Established investors remain
overwhelmingly positive about the
continent’s prospects
Glass half full: ‘Africa rising’
narrative remains resilient
Glass half empty: economic
and political headwinds
► The World Bank and International Monetary
Fund revised revised their 2015 GDP growth
forecasts down to its lowest since 2009
► Ebola and terrorist insurgencies have had a negative impact on perceptions
► Deteriorating perceptions of Africa’s
investment attractiveness
► 8.4% year-on-year (YOY) decline in
FDI projects in 2014
Page 5
Africa’s FDI landscape
EY’s 2015 Africa attractiveness survey
Page 6
Actual FDI numbers FDI project numbers fall, but capital investment and jobs surge
Africa became the world’s second-largest
destination for FDI capital inflows in 2014.
EY’s 2015 Africa attractiveness survey
FDI projects by world region (% change, 2014 vs. 2013)
-21.3%
-17.7%
-17.5%
-14.8%
-8.4%
14.0%
17.3%
Rest of Europe
Middle East
Latin Americaand the Caribbean
Western Europe
Africa
North America
Asia-PacificCapital
investment
136% YOY growth in FDI
value in 2014
FDI job
creation
68% YOY growth in
FDI jobs in 2014
Source: fDi Markets, February 2015.
Page 7
Re-emergence of North Africa Value of FDI projects into North Africa grows dramatically
Source: fDi Markets, February 2015.
North Africa sees FDI value grow, while share in job creation also increases
38.8% 40.4% 40.1%
32.1%
23.1% 16.9%
22.5%
61.2% 59.6% 59.9%
67.9%
76.9% 83.1%
77.5%
2004 2006 2008 2010 2012 2013 2014
16.5%
57.3%
34.3%
23.6% 29.5%
19.1%
51.1%
83.5%
42.7%
65.7%
76.4% 70.5%
80.9%
48.9%
2004 2006 2008 2010 2012 2013 2014
FDI projects
(2004-14, %)
FDI amount
(2004-14, %)
Sub-Saharan Africa
(SSA) SSA
North Africa North Africa
EY’s 2015 Africa attractiveness survey
Page 8
SSA: more capital, more jobs, fewer projects Southern, East and West Africa see slower FDI projects
EY’s 2015 Africa attractiveness survey
Source: fDi Markets, February 2015.
FDI projects
11% down
Sub-Saharan
Africa (SSA)
15% y-o-y drop in FDI projects
Southern Africa
West Africa
FDI projects
down 23%
East Africa
FDI projects
down 12%
► Some economies –
South Africa, Angola,
Nigeria, Ghana and
Kenya – received fewer
FDI projects.
► But Ethiopia and
Mozambique attracted
growing inflows of
projects.
+42.7% +22.7% increase in FDI capital increase in job creation
Page 9
South Africa remains top destination country Top 10 countries by share of FDI projects in 2014
EY’s 2015 Africa attractiveness survey
► Over the past five
years, SA has attracted
twice as many FDI
projects as any other
African country.
► SA is also ranked by far
the most attractive
investment destination
in Africa due to:
1. Diverse economy
2. Solid infrastructure
3. Stable political
environment
Source: fDi Markets, February 2015.
16.5%
9.7%
9.1%
8.5%
6.8%
6.7%
5.3%
4.4%
3.1%
2.7%
South Africa
Egypt
Morocco
Kenya
Mozambique
Nigeria
Ghana
Ethiopia
Uganda
Tanzania
Page 10
Diverse sources ensure ongoing resilience North America and Middle East expand presence
EY’s 2015 Africa attractiveness survey
In 2014, at the source country level, the US regained its title as the largest investor. France,
the United Arab Emirates and China also were particularly active during the year.
Source: fDi Markets, February 2015.
24.6%
14.7% 8.8% 9.1%
17.5% 15.7%
7.9%
19.2%
39.0% 36.8%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Western Europe maintains leading position, investments from North
America and the Middle East on the rise
FDI projects by source regions (in %)
Western Europe
Africa
Asia-Pacific
North America
Middle East
Rest of Europe
Latin America
and the Caribbean
Page 11
RHC emerges as key growth sector Now fourth-most-attractive sector in Africa
EY’s 2015 Africa attractiveness survey
Top two sectors by % share Source: fDi Markets, February 2015.
Top 10 sectors by FDI projects (2014)
Top sectors FDI projects
(share in %)
Jobs created
(share in %)
FDI capital
(share in %)
Technology, media and telecommunications (TMT) 19.6% ||||||||||||||||||||||||||||| 6.4% ||||||||| 5.5% ||||||||
Financial services 18.1% ||||||||||||||||||||||||||| 2.0% ||| 1.2% |
Retail and consumer products (RCP) 14.1% ||||||||||||||||||||| 31.5% ||||||||||||||||||||||||||||||||||||||||||||||| 4.4% ||||||
Real estate, hospitality and construction (RHC) 8.0% |||||||||||| 33.6% |||||||||||||||||||||||||||||||||||||||||||||||||| 43.8% |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business services 7.5% ||||||||||| 1.6% || 0.5%
Transport and logistics 6.3% ||||||||| 3.1% |||| 2.2% |||
Diversified industrial products (DIP) 5.3% ||||||| 1.5% || 0.3%
Automotive 4.1% |||||| 5.7% |||||||| 0.9% |
Coal, oil and natural gas 3.5% ||||| 3.7% ||||| 25.4% ||||||||||||||||||||||||||||||||||||||
Chemicals 3.3% |||| 2.4% ||| 5.2% |||||||
Page 12
How foreign investors see Africa
EY’s 2015 Africa attractiveness survey
Page 13
Investor perceptions Africa’s perceived attractiveness has deteriorated over the past year
EY’s 2015 Africa attractiveness survey
Source: EY’s 2015 Africa attractiveness survey (total respondents: 501).
7% 11%
14% 17% 19%
66% 60%
56% 60%
53%
2011 2012 2013 2014 2015
Deteriorated Improved
When asked about Africa’s future attractiveness, a strong majority (69%) of respondents
remain positive about the continent’s investment appeal over the next three years. However, the
proportion of optimists has fallen four percentage points since our 2014 survey.
Africa’s past attractiveness at lowest level since 2011
Page 14
Investor perceptions Even Africa’s attractiveness relative to other regions is down a notch
EY’s 2015 Africa attractiveness survey
Source: EY’s 2015 Africa attractiveness survey (total respondents: 501).
Eastern Europe (0)
201 1
Africa
Asia (+31)
North America (+16)
Western Europe (+15)
Middle East (+8)
Oceania (+6)
Latin America (+2)
Central America (-4)
CIS (-19)
201 2 201 3 201 4
10
9
7
8
6
5
4
3
2
1
201 5
Markets more attractive than Africa Markets less attractive than Africa
Numbers in brackets indicate total attractive responses minus total not attractive responses.
Latin America (-1)
Eastern Europe (-3)
Asia (+26)
North America (+13)
Oceania (+5)
Western Europe (+5)
Middle East (-0.3)
Central America (-5)
CIS (-17) 10
9
7
8
6
5
4
3
2
1
Africa
Western Europe (-4)
Middle East (-10)
Asia (+16)
Oceania (+11)
Latin America (+8)
North America (+5)
Central America (-1)
Eastern Europe (-12)
CIS (-14) 10
9
7
8
6
5
4
3
2
1
Africa
Middle East (-15)
CIS (-17)
North America (+4)
Asia
Oceania (-2)
Latin America (-14)
Eastern Europe (-17)
Central America (-19) 10
9
7
8
6
5
4
3
2
1
Africa
Western Europe (-3)
CIS (-16)
Oceania (+3)
Asia (+1)
Latin America (-2)
10
9
7
8
6
5
4
3
2
1
Africa
North America (+1)
Western Europe (-1)
Central America (-8)
Eastern Europe (-10)
Middle East (-15)
Page 15
Perception gap persists Those with an established presence remain overwhelmingly positive
EY’s 2015 Africa attractiveness survey
Source: EY’s 2015 Africa attractiveness survey (total respondents: 501).
believe attractiveness
will improve over the next
three years
Africa is the second least
attractive investment
destination in the world
30% believe attractiveness has
improved over the past year
50%
Respondents who are
not established in Africa
believe attractiveness will
improve over next three years
Africa is the most
attractive investment
destination in the world
believe attractiveness has
improved over past year 66%
81%
#1
Respondents who are
already established in Africa
Page 16
Roadblocks to investment The top five perceived barriers to investing in Africa remain consistent
EY’s 2015 Africa attractiveness survey
► Despite the “Africa rising” narrative and
steady growth in FDI inflows, there has been
no quantum leap in FDI into Africa.
► Respondents have highlighted political risk
factors, such as instability and corruption, as
the top barriers that discourage investment
on the continent. Source: EY’s 2015 Africa attractiveness survey (total respondents: 501).
Unstable
political
environment 55%
Poor basic
infrastructure 14%
Corruption 26%
22% Weak
security
Lack of highly
skilled labor 13%
Page 17
Making choices: Inclusive, sustainable growth
EY’s 2015 Africa attractiveness survey
Page 18
Strong fundamentals remain intact We believe that the African growth story is real and sustainable
EY’s 2015 Africa attractiveness survey
The African growth story is real
1988–2000 2001–12 2013–30
Above 5%
Between 0% and 5%
Less than 0% (negative)
Gross Domestic
Product (GDP) and
Compound Annual
Growth Rate (CAGR)
Number of economies growing faster than 5% a year
Sources: Oxford Economics database estimates; EY analysis, accessed in August 2014.
11
1 2 3
8 11
6
1
6
21
7 3
1 4
24
Asia Pacific CIS Central and SoutheastEurope
Middle East SSA
1988-2000 2001-2012 2013-2030
As a region, SSA
has by far the
most economies
growing at
sustained rates of
5% over the past
15 years and the
next 15 years.
Page 19
Economic resilience Many African countries have shown resilience during global downturns
EY’s 2015 Africa attractiveness survey
Structural reforms in the 1990s, strong
macroeconomic policies and early
adoption of counter-cyclical monetary
and fiscal policies enabled SSA to
weather the most recent crisis relatively
well in comparison to previous global
downturns.
GDP growth in SSA during global downturns
0
1
2
3
4
5
6
7
8
t-4 t-3 t-2 t-1 t t+1 t+2 t+3 t+4
GD
P g
row
th r
ate
(%
)
“V” shaped recovery
“L” shaped recovery
2009
Average: 1975,1982 and 1991
Recession cycles
Current cycle (t= 2009)
Average three cycles
1975,1982 and 1991 Sources: World Bank, EY analysis
Page 20
Addressing structural transformation African countries still underperform on key competitiveness measures
EY’s 2015 Africa attractiveness survey
Institutions
Infrastructure
Macroeconomic
environment
Health and
primary
education
Higher
education
and training
Goods
market
efficiency Labor market
efficiency
Financial market
development
Technological
readiness
Market size
Business
sophistication
Innovation
Africa Southeast Asia Latin America and the Caribbean
Africa’s competitiveness performance relative to other regions
Source: Africa Competitiveness Report 2013, World Economic Forum, 2013.
Page 21
Toward inclusive, sustainable growth EY’s point of view: five priorities for action
EY’s 2015 Africa attractiveness survey
Realizing the possibilities: 5 priorities for action
Africa Shared value Entrepreneurship Regional
integration
Infrastructure
development
Partnerships
Page 22
EY Strategic Growth Forum™ Africa 2015 3-4 November 2015, Johannesburg, South Africa
EY’s 2015 Africa attractiveness survey
EY hosts the Strategic Growth Forum in several locations around the world.
EY in Africa ► Fourth Forum hosted in Africa
► Focus on the strategic growth
opportunities that Africa
offers and the challenges that
need to be addressed to
realize these opportunities
► Unparalleled opportunity to
network, share ideas and
learn from those doing
business in and implementing
government policies across
Africa
► EY World Entrepreneur
Award™ — Southern Africa
during gala dinner on 3
November 2015 Visit ey.com/sgfafrica 2015
Page 23
Making choices EY’s 2015 Africa attractiveness survey
EY’s 2015 Africa attractiveness survey
Download the full report at:
emergingmarkets.ey.com
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@EY_EmergingMkts
@EY_Africa
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