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Most US investors unaware of African opportunities – survey

posted Jun 27, 2013, 1:48 PM by Nnamdi Eguh

Some 80% of institutional investors surveyed in the US are largely unaware of investment opportunities in Africa, according to research released by business advisory firm FTI Consulting on Thursday.

The findings of the survey, which were released on the eve of a visit by US PresidentBarack Obama to Africa to bolster US–Africa trade and political relations, further revealed that two of every five investors surveyed believed that trade relations between the US and South Africa were “strong”.

Beyond trade issues, more than seven in ten investors surveyed stated that political links between South Africa and the US could be stronger.

FTI said these findings demonstrated a significant disparity between the poor sentiment expressed towards African investment by US and European institutional investors, and the better sentiment expressed by African executives.

“This suggests that African role-players have a communication challenge that needs to be addressed if they are to attract foreign direct investment to their countries,” FTI South Africa strategic communications head Alan Arguile said in a statement.

When asked to identify the drivers that were harming Africa’s attractiveness as an investment destination, 38% of those polled strongly agreed that labour unrest in South Africa’s mining sector was damaging investor appetite, while 29% strongly felt that ethnic and religious conflicts in Nigeria were harming its investment appeal.

In addition, some 90% noted difficulty in accurately understanding “on the ground” realities on the continent.

When asked which countries in Africa they were currently considering investing in, or those that they believed would become gateways to investment over the next 12 months, 73% of respondents identified South Africa, followed by Egypt (27%), Kenya (27%) and Nigeria (23%).

Arguile said that, while several African countries had been identified as high-growth geographies by institutional investors, it was critical to sustained economic growth that key African messages were continually heard, expanded on and understood.

“This will ensure that investors are aware of the investment opportunities available on the continent during a time of great global trade competition. Our research shows there still is work to be done in this regard,” he commented.