In a sign of diversification of Africa’s investors, investment from the Asia-Pacific region into Africa hit an all-time high in 2016, accounting for more than a fifth of projects and more than half of capital investment.
Companies from the Asia-Pacific region were also the largest contributors to Foreign Direct Investment(FDI) jobs to Africa.
In recent years, China and Japan have been competing with other Western countries — including the US, to build influence on the continent.
According to the According to latest EY’s latest Africa Attractiveness report, China-sourced FDI into Africa increased dramatically in 2016. With a 106% jump in projects, China became the third largest investor in the continent.
In fact, this was the highest level of FDI from China across all three metrics, (namely projects, capital investment and jobs) since EY’s Africa Attractiveness Program began. Almost a quarter of Chinese FDI projects were directed toward Egypt.
In January 2016, the Chinese President Xi Jinping, visited Egypt during which his country committed to a US$700m loan to the National Bank of Egypt.
China is also planning US$15b of investments across 15 electricity, infrastructure and transport projects in Egypt.
Across Africa, Chinese investors took an active role in the TMT, automotive and business services sectors in 2016.
In the case of Japan, the country directed 27 FDI projects to Africa in 2016, more than double the 12 FDI projects in 2015.
Both capital investment and jobs created increased during the two years, up 757% and 106%, respectively.
South Africa was the single largest destination for Japanese investors, accounting for more than one-third of projects, followed by Egypt and Tanzania. By sector, there was an uptick in FDI in TMT and diversified industrial products (DIP).
In recent years, Japan has deepened ties with Africa however, increased in the CPR and transport and logistics sectors. in a bid to secure resource supplies and in return, fulfil the continent’s demand for infrastructure.
In August 2016, Japanese Prime Minister Shinzo Abe announced US$30b in investment to Africa, including about US$10b committed toward electricity generation projects and for the upgrading urban transport systems and ports.