Economic growth has been singled out as being the key driver of change in Africa.
With increasing stability in the region and growing appetite from offshore investors for real estate asset exposure in the African market, the attraction of real estate across Africa lies in its fast-approaching development potential.
According to the World Bank report entitled: "Global Economic Prospects", growth in SSA remained robust at 4.6 percent in 2012.Excluding South Africa, the region's largest economy, GDP output expanded 5.8 percent in 2012, with a third of countries in the region growing by at least 6 percent.Robust domestic demand, still high commodity prices, increased export volumes and steady remittance flows supported growth in 2012.
Much of the increase in net capital flows came in the form of increased foreign direct investment flows to the region, which increased to $37.7 billion in 2012 from $35.7 billion in 2011, notwithstanding the 6.6 percent decline in foreign direct investment flows to developing countries in 2012.
Tourism, an important driver of growth in the region, remained robust, with strong tourist arrivals in many of the popular destinations, including South Africa, Mauritius, Sierra Leone, Madagascar and Cape Verde.Medium-term growth prospects remain strong and should be supported by a pick-up in the global economy, still high commodity prices, and increased investment.Since 2000, investment in the region has increased steadily from 15.9 percent of GDP to over 22 percent of GDP in 2012.
The World Bank projects foreign direct investments to the region to increase to new record levels each year reaching $55.6 billion in 2015.This is expected to continue, particularly so as an increasing number of the region's economies are able to tap into international capital markets to help address binding infrastructural constraints. Overall, the region is projected to grow at its pre-crisis average rate of 5 percent over the 2013 to 2015 period.
Excluding, South Africa, the region's growth will average 6 percent over the 2013 to 2015 period, according to the World Bank.An estimated population in excess of 150 million people coupled with projections that Nigeria will be Africa's largest economy before 2020 bodes well for projected consumption demand, which will in turn drive investment in the real estate.