Intra-African investment accelerates, job opportunities abound

在赞比亚首都卢萨卡市中心的"皮佩"超市里，购物人群摩肩接踵。这已经是南非第二大连锁超市"皮佩"在赞比亚开设的第七家连锁店了。在加纳首都阿克拉，南非购物超市"肖普莱特"也成为该市的地标。记者拿着南非标准银行的信用卡，也几乎可以在非洲各国刷卡消费。

In downtown Lusaka, Zambia, throngs of shoppers descend upon a newly opened "Pick n Pay" outlet. This is the seventh outlet that "Pick n Pay", South Africa's second largest supermarket chain store, has established in Zambia. In Ghana's capital Accra, South African supermarket chain "Shoprite" has become a city landmark. Holding a credit card from the Standard Bank of South Africa will allow one to go cashless in almost all of Africa.

This article is originally translated from Mandarin, click here to read the original from China News Service.

South Africa is increasing its size of investment in various African countries. In Ernst & Young's 2014 report on Africa's attractiveness as an investment destination, for the year 2013, South Africa initiated 63 investment projects in other African countries, an increase of 425% from pre-2008 financial crisis levels. South Africa's accumulated capital stock in other African countries is also now 2.5 times of pre-crisis levels. South Africa has become the second largest source of foreign direct investment (FDI) for the rest of Africa. South African president Jacob Zuma has expressed that since 2007, South Africa's investment in other African countries has created 45,000 jobs.

South Africa's growing investment levels is just part of a larger trend — the spike in intra-African investment. The Ernst & Young report indicates that intra-African investment has risen as a share of total FDI from 8% in 2003 to 22.8% in 2013. The UN Conference on Trade and Development (UNCTAD) released a report titled "World Investment Report 2014" this June, stressing that intra-African investment has become the major source of foreign investment for many small landlocked African nations.

Professor Mthuli Ncube, Chief Economist and Vice President of the African Development Bank, believes the rapid growth of intra-African investment can be attributed to three main reasons. First, the burgeoning consumer market in many African countries is a huge draw for investment. Second, the deepening of African regional integration has made it more convenient for intra-African investment. Some African countries and sub-regions are moving up the value chain, and this creates incentives for intra-African investment. Third, large amounts of petrodollars earned in some African economies such as Nigeria and Angola lead these African countries in search of investment opportunities. Furthermore, a slump in South African economic growth is also partly why South African companies are keen to discover new growth markets. Ncube says intra-African investment is driving African leaders towards realizing deeper regional integration. This is important as it can increase national revenues and reduce Africa's reliance on foreign aid.

A report titled "African Economic Outlook 2014" writes that in contrast to foreign investors, who still mainly focus on mining and resource-related industries, African investors show a greater preference in finance, infrastructure building, communications and retail industries. UNCTAD's "Economic Development in Africa Report 2014", released this July, further notes that as the consumer market in Africa grows, intra-African investment is turning to industries such as F&B, information technology (IT), tourism, finance and retail. But Mcube is also quick to point out that the share of intra-African investment in the total amount of FDI that Africa receives is still relatively small, notwithstanding the fact that intra-African investment has only taken flight in selected African countries and not in the whole of Africa. To date, South Africa, Nigeria and Kenya are the main sources of intra-African investment.

 This article was translated by Guan Hui Lee, Staff Intern with the Asia Program at the Wilson Center.

Photo courtesy of residentevil_stars2001 via Flickr Commons