FDI in African IT suffers four-year decline
Investment into Africa's software and IT services sector has experienced a year-on-year decline between 2011 and 2014.
According to greenfield investment monitor fDi Markets, between January 2011 and December 2014, total foreign investment in the software and IT services sector in Africa declined. The total number of software and IT services projects decreased from 57 in 2011, to 51 in 2012, and 42 in 2013, before reaching a low of 40 in 2014.
The number of investing companies also fell from 46 in 2011, to 32 in 2014. The number of jobs created and capital expenditure also dropped between 2011 and 2014. fDi Markets data shows that the number of jobs created in the African software and IT services sector declined from 7777 in 2011 to 1761 in 2014, a 77.36% drop. Capital expenditure fell 63.68% from $1.64bn in 2011 to $595.6m in 2014.
South Africa-based companies accounted for the highest number of African software and IT services projects, with 82 projects recorded between 2011 and 2014. Investment from the country declined over the four year period, however, hitting a four-year low in 2014, when just 15 projects were recorded, compared with 24 in 2011.
In terms of sub-sectors, the largest investment recipient between 2011 and 2014 was software publishers. The sector witnessed a slight increase between 2011 and 2012, recording 27 and 30 projects, respectively, before seeing project numbers falls to 24 in 2013 and 21 in 2014.
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