Sub-Saharan Business Leaders Are Almost Twice as Optimistic about African Growth Compared with Global Business Leaders
24 Percent of Institutional Investors See Opportunities for Growth in Africa
FTI Consulting, Inc. (NYSE: FCN), the global business advisory firm dedicated to helping organisations protect and enhance their enterprise value, yesterday announced research that indicates key messages, which could spur higher African economic growth rates, are not reaching the global business community.
The FTI Consulting research conclusions were compiled following a survey of 1,535 global institutional investors, global business leaders and sub-Saharan Africa business leaders.
Commenting on the research, Mark Malloch-Brown, EMEA Chairman of FTI Consulting, said, “Africa has the potential to be a destination of choice for institutional investors given its abundant natural resources, eco-tourism potential and favourable demographics. Many African countries already are capitalising on their various assets and have been identified as high-growth areas by many investors. However, it is crucial to sustained economic growth that key African messages continually are heard, expanded and understood. Our research shows there still is work to be done in this regard.”
According to the research, 53 percent of respondents expect significant economic growth in Africa in the coming year, with 60 percent of Asian investors positive. However, in North America, just 37 percent of respondents are optimistic, and 27 percent of respondents have no opinion.
Global business leaders are 10 percent less optimistic about significant economic growth in sub-Saharan Africa compared with the rest of Africa, with just 43 percent optimistic about economic growth prospects in the region. By contrast, business leaders in the sub-Saharan countries of Ghana, Kenya and Nigeria were almost twice as optimistic at 83 percent. Business leaders surveyed in Ghana reported the highest level of optimism at 88 percent.
The disjoint between sub-Saharan Africa business leaders and global business leaders continued when impediments to growth were investigated.
According to the research, global business leaders are significantly underestimating the continent’s skilled workforce and telecommunications infrastructure. Just 18 percent of global business leaders favourably considered the level of skills in Africa versus. 46 percent of sub-Saharan Africa business leaders. Similarly, the gap between global and sub-Saharan Africa business leaders regarding the continent’s telecommunications infrastructure is 38 percent.
The research also found that despite the fact that the agriculture and farming and the mining and petroleum industries rank third and fifth, respectively, in attractiveness for global institutional investors in 2013, FTI Consulting found that only 24 percent of institutional investors see growth opportunities in Africa.
Dan Healy, Managing Director in the Strategy and Research team at FTI Consulting, who conducted the research, commented, “It’s not surprising that the telecommunications infrastructure is the most underestimated of all the key issues assessed due to its rapid adoption across the region. Mobile and digital telecommunications are helping the region to leapfrog earlier evolutions of the Internet, while perceptions of African telecommunications lag. The challenge for African business leaders is to update global perceptions of the business environment to encourage more inbound investment.”
About the Research
Market research was conducted in three phases using an online survey methodology by FTI Consulting:
Phase 1: Global Business Leaders
Research with n=1,031 respondents across 15 countries (Australia, Brazil, Canada, China, France, Germany, India, Japan, Poland, Russia, South Africa, Spain, the United Arab Emirates, the United Kingdom and the United States). Phase 1 was conducted in January 2013.
Phase 2: Global Institutional Investors
Research with n=160 respondents around the globe. This phase was conducted in February 2013.
Phase 3: Sub-Saharan Africa Business Leaders
Research with n=344 respondents across Ghana, Kenya and Nigeria. The final phase was conducted in February 2013.