"Africans have not defined their economies and growth prospects to the world but have allowed international bankers, political analysts and credit ratings agencies to take the initiative and write up, or sometimes even belittle, the African growth story," Brand South Africa chief executive, Miller Matola, said at the ongoing World Economic Forum (WEF) Africa.

International investors, business and political leaders have gathered in Addis Ababa this week to debate Africa’s remarkable transformation at the 2012 WEF Africa.

The African continent offers the highest returns on investment of any region and is home to seven of the ten fastest growing economies in the world.

Projections

The Economist projects that WEF Africa hosts Ethiopia’s economy will grow at 8.1% between 2011- 2015, making it the third fastest growing economy in the world. Over the last decade Africa’s economic output has tripled while sub-Saharan Africa is set to grow at about 5% for the next 10 years, second only to emerging Asia as the fastest growing world region.

Matola said Africans are now demonstrating greater confidence in their continent.

According to recent Ernst & Young research three of the top five fastest growing investors into new projects in Africa between 2003 and 2011 were the African economic power houses, South Africa, Nigeria and Kenya.

South African investment into Africa grew at a rate of 64.8% during the period 2003-2011.

Factors

Explaining the many factors behind Africa’s phenomenal growth since the turn of the century, Matola said these included greater democratisation and stability, economic reform, urbanisation, improved uptake of ICT and financial services, a younger, growing and more affluent population, and the on-going resources boom.

To encourage further continental growth South Africa is orientating its government policies, regulations and institutions to support African investment and integration.

According to Matola, the world is slowly waking up to the massive projects underway to build new roads, rail, ports and other infrastructure that link previously isolated countries and regions, and that is accompanied by the expansion of free trade areas which will eventually encompass the whole continent.

“Over the last decade South Africa has been the leading foreign direct investor in Africa though it is now being joined by China and other developing nations. Now our state institutions have been authorised to invest – particularly in infrastructure and industrialisation,” said Matola.

Pledges

The Industrial Development Corporation, South Africa’s Government-owned development finance institution - expanded its remittances to include African investment and established relationships with development finance institutions and regional forums in 34 African countries.

It will consider new or existing companies within Africa with funding needs up to US$125million.

South Africa’s Public Investment Corporation – which mainly manages government workers’ pensions and has over US$125billion in funds – has set 10% of its funds aside for international investment, of which half of which will be in Africa. Of this, 40%-60% (up to US$3.8billion) will be earmarked for private equity.

According to the recent Ernst & Young 2012 Africa attractiveness survey, foreign direct investment projects in Africa grew 27% between 2010 and 2011.

“Unsurprisingly,” said Matola, “the report found that people already doing business in Africa were extremely positive. There are lingering negative perceptions – but only amongst those who are not yet doing business in Africa. Executives who don’t do business here, those who have the least exposure, and one presumes the least knowledge, are the most negative about Africa.”

Growth

To participate in the African growth story Matola said South Africa was investing heavily to improve its competitiveness and reduce unemployment.

“African countries should also promote their regional as well as their national advantages. Investors are very excited about the pending 26 African nation free trade area covering Southern, Central and East Africa,” he said.

“By June 2014, nearly 60% of the economy of Africa with a combined GDP of $1trillion and encompassing 600 million people will be a single free trade area.

Already we are creating the urban development corridors, the networks of interlocking regional infrastructure, and the reducing the non-tariff barriers which will unlock these huge markets.”

Matola said there was an uplifting optimism in the air of Ethiopia’s capital.

“There is a strong feeling that the continental progress in good governance and the more than decade long growth spurt can be made sustainable," he added, "African countries and businesses seeking investment must tell their own story or risk being misunderstood by potential investors and supporters”.

“Africa’s time has come” he said, “Its time the world knew”.