Foreign direct investment at an all time high in Africa

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Although the number of foreign direct investments (FDI) fell by 8.4% in 2014, capital investment into Africa surged to $128 billion a year on year increase of 136%. This is according to the recently released EY 2015 Africa Attractiveness Survey. The survey also stated that the average investment increased to USD 174.5 million per project up from USD 67.8 million in 2013. This can be considered to be a positive outlook for the region given that FDI is being stimulated by a number of megadeals instead of numerous smaller deals.

In the past there has been a negative perception of investing in Africa coupled with the fear of the unknown. However in 2014 traditional investors refocused their attention on the continent. They were attracted by strong macroeconomic growth and outlook, improving business environment, a rising middle class, abundant natural resources and infrastructure development. These factors have resulted in global capital investment and job creation hitting an all time high during 2014 in the continent.

Efficient infrastructure is key to ensuring effective functioning of the continent. In areas with underdeveloped infrastructure logistics costs tend to be driven up and due to this it is estimated that supply chain costs are up to nine times more expensive in Africa in comparison to other regions in the world. With increased FDI and continued macro-economic growth, Africa is poised to be an economic power house in the future. The region is abound with untapped opportunities and has a lot of scope for growth.

It is due to this scope of growth that DHL Express has continued to invest significantly in Sub Saharan Africa (SSA) in order to expand their capabilities and cater for growth across all the markets. There are plans by DHL to invest millions of Euros across SSA in 2015. Major projects underway include upgrades to facilities and shipment handling systems in South Africa, Kenya, Uganda, DRC, Rwanda, Angola, Zimbabwe and Botswana. Later this year planned upgrades will commence in Ghana, Nigeria, Ethiopia, Benin, Cameroon, Guinea Republic, Gabon, Tanzania, Mauritius and Ivory Coast. They will also be carrying out number of vehicle and technology upgrades taking place this year.

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