This is Africa (TIA) published their annual Africa Investment Report earlier this month and their rulings point to the current state of flux and uncertainty that many African climes are currently characterised by.
According to their findings, China has surpassed the US in terms of the amount of capital being poured into Africa as the Eastern superpower continues to forge closer economic and political ties with Africa. Their rise to the top spot in terms of greenfield foreign direct investment into the region comes because its investors have excelled in the areas that took the lion’s share of overall investment into the region in 2016: notably, construction and real estate.
Building on a trend that began in 2015 following the fall in energy, mining and other commodity prices, foreign investors are gradually diversifying their interests away from traditional energy and extractives sectors and the real estate and construction sectors are receiving more attention.
Data from ILOSTAT demonstrates that Africa’s population totalled 1.2 billion in 2017 and is forecast to more than double to 2.45 billion by 2050. While the attractive narrative of strong population growth and urbanisation is a clear driver for the investment activity, investors need to be reminded that real estate investment in African real estate is not as straightforward as it may appear.
Other findings from the report are shown below:
Download the report here.