FDI up in N-Africa, bucking continental trend

Political uncertainty following the Arab Spring in 2011 is beginning to fade, and North Africa is becoming more attractive as an investment destination. Foreign direct investment (FDI) investors returned enthusiastically to Egypt and Morocco. Politically stable, gateway to both Europe and Africa, and committed to reforms aimed at increasing foreign investment, Morocco was the largest recipient of FDI in the Maghreb region in 2014, which grew 7.8% in 2014, reaching US$ 3.5 bn. Largely, this is the result of the Moroccan government’s sustained effort to implement economic policies aimed at attracting foreign investment and effective leveraging of the country’s geographic placement to turn Morocco into a crosscontinental, regional economic hub.

The Global Financial Centre Index  2016 ranks Casablanca Stock Exchange as the largest in Africa and fourth in the wider MENA region, trailing but catching up quickly with Tel Aviv & Abu Dhabi and the regional leader Dubai. Further more, the  global GFCI questionnaire ranks Casablanca third  likely to become more significant in the next few years, behind only Singapore & Shanghai.

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Opportunities abound in infrastructure, consumer-facing and agricultural sectors
Two trends defining Africa’s future growth path include rising urbanization and a growing consumer class. In line with these trends, FDI data reveals strong inflows into real estate, hospitality and construction (RHC) in 2014.

Three consumer-facing sectors — technology, media and telecommunications (TMT); financial services; and consumer products and retail (CPR) again attracted the largest share of investor activity. Respondents to our survey are also excited about prospects in the relatively underexploited
agricultural sector.

Traditional investors regain interest
In 2014, traditional investors, including those from North
America and the Middle East, refocused their attention on Africa.
Investors from the US, France, the United Arab Emirates (UAE), Portugal and China were particularly active during the year. From a regional perspective, Western Europe and Africa remain the largest sources of FDI into the continent.

FDI Inflows By Countries and Industry

Main Investing Countries 2014, in %
France 21.0
United Arab Emirates 13.3
Saudi Arabia 12.8
USA 11.9
Kuwait 5.3
Switzerland 5.1
Spain 4.3
Italy 3.6
Turkey 2.7
UK 2.6

sources
EY’s attractiveness survey, Africa 2015: Making choices
Sandanter Trade Portal Morocco: Foreign Investment
GFCI 19 Most Significant Centres
GFCI 19 Middle East and Africa