* Africa seen attracting large sums as perceptions improve
* Foreign direct investment could reach $150 bln by 2015
* Survey puts Asia ahead of Africa in terms of perception
* Key sectors include consumer goods, mining and financials
* Africa in same rank as Latin America and Eastern Europe
By Chijioke Ohuocha
LONDON, May 3 Africa could attract billions of
dollars in new investment over the next few years as emerging
market investors search for higher returns and foreign
perceptions of risk improve, Ernst & Young said on Tuesday.
The global accounting firm said in a report titled "It's
time for Africa" that foreign direct investment (FDI) into the
continent was forecast to reach $150 billion by 2015 from $84
billion in 2010, driven by strong growth in new projects from
Ernst & Young surveyed over 562 global executives on where
they would invest over the next decade and 42 percent of them
were considering investing further in Africa while an additional
19 percent confirmed maintaining operations in the region.
The report said the continent was becoming increasingly
attractive to international investors planning new developments
and expanding existing ones and that perceptions were becoming
increasingly positive over the longer term.
It identified Asia as the only continent ahead of Africa in
terms of investors' perceptions.
"While Africa's challenges are well documented, there is an
increasing recognition that the continent is on an upward
trajectory; economically, politically and socially," Ernst &
Young's said in its 2011 Africa attractiveness survey.
It projected GDP to grow to $2.6 trillion by 2020 from $1.6
trillion in 2008 and consumer spending to increase 62 percent to
$1.4 trillion over the same period.
Key sectors targeted by investors include consumer products,
construction, telecoms, financial services and mining and metals
-- perceived to have the highest growth potential over the next
The survey showed emerging market investors were positive
about Africa's attractiveness, viewing the region as critical to
their own growth, while developed markets investors were
cautious, saying that the region still needed to develop
The African continent, home to one billion people, had long
been ignored by international investors who only thought of the
region in terms of political instability and corruption.
But as the majority of the 54 countries which make up Africa
embrace democracy and install reform-minded governments,
analysts say the world's poorest continent and least tapped
frontier markets could fast become a diamond in the rough.
Ernst & Young said investments in the continent by African
countries grew 21 percent between 2003-2010, but actual amounts
were less than invested by other emerging economies.
It highlighted the high levels of risk involved in investing
in Africa but said the profitability levels compensated for the
risk and that some sectors had little competition.
"Despite the improving perceptions of Africa, it is in
competition for the international capital and resources that
will help drive and sustain growth and social development," it
"It is currently ranked in the same category as Latin
America and Eastern Europe in terms of attractiveness for
(For full Reuters Africa coverage and to have your say on the
top issues, visit: af.reuters.com/ )
(Editing by Ron Askew)