Economic growth across the continent remains resilient but figures are likely to come in at their lowest in five years.
This is according to EY’s Africa attractiveness survey. Although foreign direct investment (FDI) projects fell, foreign direct capital investment into the continent surged.
The EY survey saw over 500 global business leaders, in over 30 countries, give their views on the potential of the African market.
It reports that although Africa faces a lower growth forecast, the continent remains resilient.
Sub-Saharan Africa will still experience the second highest economic growth rate in the world this year.
Last year the region became the leading recipient of capital investment. However, the value of funds invested in African projects declined to R1-trillion. In 2014, the investment was R88,5-billion (R1,27-trillion).
Nigeria, the continent’s largest economy, has slowed down in growth. It was further affected by the decline in the oil price and currency devaluation pressure.
South Africa, the second largest economy in Africa, has been hit by stagnant growth this year, but has managed to avoid downgrades by ratings agencies.
Economic growth across the region is expected to remain slower compared to the past 10 to 15 years.
North Africa experienced 8,5 percent year-on-year growth in FDI projects.
The report also notes that over the past 10 years, there’s been a shift in sector focus in FDI from extractive to consumer-facing industries.
Mining and metals, coal, oil and natural gas, which were previously the key sectors attracting major FDI flows, have given way to consumer products and retail.