Africa has become one of the fastest growing regions in the world and the continent has firmly positioned itself as a global investment destination of choice, KPMG said in a press statement released last week.
KPMG is a global network of professional firms providing audit, tax and advisory services.
“There are significant business opportunities across the continent driven by an insatiable demand for Africaâ€™s resources, a rapidly growing population with an unprecedented rise in consumer demand and the related infrastructural development that is urgently required in all areas,” says KPMG, quoting its head of strategy for Africa Tim Bashall.
The firmâ€™s statement comes when Malawi is witnessing a slow down in attracting foreign direct investment (FDI), especially due to persisting economic challenges such as erratic power supply, foreign exchange shortages and intermittent water supply, especially in its major cities.
Despite Malawi attaining a stable macroeconomic environment coupled with successive high economic growth rates, other stumbling blocks to increased investment levels in the country include persisting tough business regulation and high costs of doing business.
A high investment level into the country is one of the key contributors to the growth of an economy, as measured by the real gross domestic product (GDP) as it creates jobs as well as expanding government tax revenue buffer.
“The African story still has elements of political and economic uncertainty, but overall business opportunities are greatly improving. Investors are, therefore, thinking in cycles of 15 to 20 years,” says Bashall.
He says most investors worry about political risks and change of legislation in African countries, but he stresses that such worries have lessened.
Bashall also observes that African countries have become increasingly stable and that there are many promising examples of public sector reforms which have helped to improve the business landscape, including improving regulatory frameworks.
The statement also quotes Helios Investment Partners chief operations officer Henri Obi who observes that lack of well-trained human resources offers a chance to build a work force suited to the business environment on the continent.
According to statistics provided by KPMG, in 2012 to 2013 alone, the continent is expected to grow by 5 percent and it is estimated that Africa â€˜s gross domestic product (GDP) could be $2.6 trillion by 2020.