Continental Shift – Doing Business in the New Africa...



The ‘continent of despair’ or an untapped market eager for new products and services? Africa, it seems, can be both. Making the most of opportunities ahead of competitors is not a question of boldness, but of having an eye for detail beyond the headlines – and an ear for advice.

The continent of Africa has emerged as one of the fastest growing markets in the world, with imports rising around 7% a year for the last two decades. At this rate of growth, African countries could be spending USD 500 billion in the next 20 years. But many African countries still have serious problems – corruption, an informal sector that is often larger than the tax-paying formal sector, and trade deficits resulting from a low level of exports, in turn due to a dearth of larger manufacturers. One of the biggest challenges for any business looking to find partners, suppliers or investors is poor compliance with international standards.

Headline stories have largely focused on falling commodity prices, declining Chinese demand and political instability. Counter that, however, with predictions such as that of Mohammed Dewji, president and CEO of MeTL Group and one of the region’s most successful entrepreneurs. Presenting to the World Economic Forum in January 2017, he advised businesses to look beyond the headlines and tipped 2017 to be the year the continent bounces back.

“Here on the ground, I am seeing something different,” says Mohammed Dewji. “An environment where private-sector-led investment is starting to flourish, in large part thanks to government-led far-reaching economic and political reforms.”

And here lies the secret to understanding the opportunities and risks Africa presents – in a continent of 54 very different countries, “on the ground” is what counts. For any company considering business within an African country, that means access to up-to-date local knowledge and expertise. It is this grassroots information that help businesses tap into the potential and gain advantage over those competitors who look only at the macro level.


The message across the continent, however, is that small- to medium-sized enterprises are missing out on contracts and joint enterprises through a lack of compliance. Not only does this make partners and customers wary, but it also blocks access to cheaper financing from foreign investment.

“Joint ventures with foreign companies are few and far between, because local companies tend to fail at the due diligence levels, which makes them high risk,” says Sam Thakkar, managing partner, UHY Thakkar & Associates, Uganda. “All it needs is for SMEs to become more innovative in their approach and they would be in a better position to expand their businesses. They would also open up more opportunities for external investors and customers.”

Uganda is also not alone in recognising non-compliance as a major block to doing business and to economic growth. It is also not alone in seeing the start of change for the better. Among the other African countries now working to raise the bar are Mozambique, Angola, Ghana and Zambia.


While Angola has not had a good reputation for compliance and transparency historically, there have been changes, including tax and regulations reform. A newly developed accounting and audit board regulates financial operations and is just one step away from becoming part of the international standards boards.

“Africa continues to be a challenging, yet attractive, place to invest,” says Armando Paredes, managing partner, UHY A Paredes e Associados-Angola Auditores e Consultores, SA, in Angola.

Angola’s economy, he says, is driven by oil and has been hit by mismanagement of its fortune from its heyday and a lack of industry diversification. To remedy this, the government is now pushing for other sources of income, including manufacturing, farming and fishing. The promise is of new opportunities in many underdeveloped sectors, albeit that the high cost of entry and the bureaucracy make it a difficult leap for many businesses.

“For companies looking to move into Angola, the key is to have a plan in place for developing a local workforce and for forging partnerships,” advises Armando. “SMEs need local expertise and that is really our forte – detailed information about the path to follow and the steps in whatever type of partnership a company chooses.”


Years of civil war between the government and the right-wing Renamo militant organisation have certainly not been conducive to doing business safely or successfully in Mozambique. But, says, Carlos Sitoe, managing partner, UHY Sociedade de Ensino e Consultoria (SEC) in Maputo, peace talks could herald a new era for the country.

“Mozambique actually experienced growth of around 8% between 2010 and 2014, but political instability over the last three years has halved our economic growth rate,” says Carlos. “Current talks look promising and could see the economy move into growth again. Peace will create enormous opportunities for inward investments, both from Africa and internationally.”

Carlos sees potential in significant changes to agribusiness in Mozambique, along with the exploitation of oil and gas resources.

“The government is now ensuring people can do business in Mozambique with fewer constraints,” adds Carlos. “And we are playing our part by sharing information and carrying out training so that SMEs can improve their compliance with international standards and regulations.”


“Uganda has seen stability now for over 30 years and the country intends to become a powerhouse for East Africa over the next 20 years,” says Sam Thakkar. “There is new thinking on corporate governance, new standards that meet international requirements, and development to help Ugandan companies maximise their involvement.”

Take oil and gas, which is expected to generate USD 25bn over the next seven to ten years. The Ugandan government is encouraging joint ventures, with the stipulation that 48% of each venture must be Ugandan-owned. SMEs in Uganda have just as much a chance of winning the multi-million dollar contracts as anyone else.

“We are already working with international oil companies to see how a professional firm like ours can help both sides ensure compliance. We have taken part in the review of the creation of a National Supplier Database and are talking to venture capitalists, private equity companies and individual investors in the UK, USA and other countries who are desperate to tap into the African markets. We will work with them to see how we can ‘marry’ them to healthy local companies. A similar drive is expected in agri-processing.”


Henry Djangmah, international liaison partner, UHY Voscon Chartered Accountants, Ghana, highlights oil and gas production, healthcare, agriculture, mining, tourism and financial services as some of the sectors with the most to offer business investors.

“The lack of compliance with international standards and regulations by SMEs is an issue in our country however, as this inhibits attraction of finance and external partnerships,” acknowledges Henry. “This issue stems from the fact that firms tend to lack competency in corporate governance.”

Meanwhile, Ghana’s Ministry of Food and Agriculture is starting a number of projects to facilitate agriculture and agribusiness, and the government and donors such as the World Bank and the United States are promoting horticulture. There are opportunities too in tourism and leisure, and in what Henry describes as “one of the continent’s brightest prospects” – financial services.

“Our office offers training to our clients’ finance staff, assistance in setting up internal processes and system audits to give them an advantage over their competitors,” he says, adding that these services sit well alongside more specialised corporate advisory services for investors, such as mergers and acquisitions, due diligence and capital formation.


“We see a lot of poor compliance with standards and regulations,” says Kelly Mwansa, tax specialist at UHY AMO Certified Public Accountants in Lusaka, Zambia. “This also links to a lack of working capital and the high cost of interest to acquire it.

“At the same time, there is great potential for businesses that can add value to the copper industry, as well as prospects in agriculture and related areas, and in hydro and solar power generation and distribution.”

The Zambian economy is highly dependent on the price of copper, so economic swings are common here. Zambia’s central location is, however, a major advantage for trade with the rest of the continent, and the Zambian government is working on bilateral trade agreements with neighbouring Angola and the Democratic Republic of Congo.

“The Zambian government is working hard to create a better environment for business,” says Kelly, “including the Investment Promotion and Protection Agreement (IPPA), incentives for firms investing in the Multi-Facility Economic Zone and PPP development opportunities.”


The business landscape has been changing fast, says Mohammed Dewji – the result of increased regional mobility, and rapid urbanisation and population growth, which have boosted demand for African-manufactured products and services.

“Doing business in Africa offers some unique obstacles, but also endless opportunities,” says Henry Djangmah. “With fewer political struggles and economic growth rates now competitive with those of other developing regions, Africa is changing for the better.”

Sam Thakkar agrees. “There are problems everywhere in the world now. The UK and Europe are grappling with Brexit, and the world is adjusting to the new US administration. Putting these issues together, I think many countries in Africa are looking very promising indeed.”

With the public sector facilitating the establishment of Africa’s biggest economic bloc – with the potential to culminate in a Free Trade Area spanning the Cape to Cairo – the next great investment destination for 2017 may very well be Africa.

Notes for Editors

UHY press contact: Dominique Maeremans on +44 20 7767 2621


European economies lag in capital investment, putting future growth at risk...



  • Europe sees capital investment fall 6% in five years – while USA raises it by 33%
  • China increases capital investment by 73% in five years

Europe is lagging behind the world average in terms of capital investment in its economies’ business resources and public infrastructure, putting future growth prospects at risk, reveals a new study by UHY, the international accounting and consultancy network.

According to UHY, European countries on average have seen capital investment decrease by 5.5% over the last five years* to just USD 187billion in 2015 (latest figures available). By contrast, the world average has increased by 21.1% to USD 364.2billion over the same period.

UHY says higher capital investment levels are an indicator that businesses are positioning themselves to expand capacity, to improve productivity, or to move into new markets by opening new sites. They also reflect governments’ support for growth by improving the transport links, power generation capacity and other vital infrastructure that businesses rely on.

The UHY study looked at “gross capital formation” – or capital investment – in 41 major economies around the world, measuring trends over a five-year period, and comparing investment levels to their Gross Domestic Product (GDP).

Gross capital formation measures spending on assets such as IT systems, new equipment and machinery, and investments in infrastructure projects by governments. The UHY study compares it to GDP in order to put it into context against the size of a country’s economy.

The G7 is also seeing a slower rate of increase than the world average, raising capital investment by an average of 11.1% over a five-year period. However, the average amount invested by G7 economies is still substantial – at over USD 1trillion in 2015 (or 20.7% of GDP).

China and USA powering ahead

At the top of the table, China is powering ahead, increasing capital investment by 73% to USD 5trillion. This is equivalent to 45% of its GDP. UHY says that China’s extremely high levels of investment in recent years have helped underpin its long run of robust growth, which remains comparatively high, at 6.9% in 2015**.

Alongside a wide range of major public infrastructure projects helping improve productivity and competitiveness, businesses in China have been rapidly expanding capacity to keep pace with demand for goods, invest in innovation and strengthen their position in the global marketplace.

UHY adds that as China has witnessed significant amounts of capital investment over the past decade, the government is now working to start to shift the economy towards becoming a consumer-led economy.

Comments Bernard Fay, Chairman of UHY: “Capital investment is vital in paving the way for economic growth, so Europe simply can’t afford to fall behind.”

“As things stand, European economies risk being outpaced by both emerging and other developed economies. While in many developed economies, businesses’ and governments’ ability to invest was hit by recession, there’s a stark contrast between the relative lack of investment in Europe and activity in the US which has remained far more robust.”

“Companies in many emerging economies have positioned themselves for growth by pumping more capital into investment projects as they gear up to seize greater market share or sharpen their competitive edge. Where China has led the way, others are following.”

“It’s critical that governments pro-actively support business investment, especially by enacting measures to help small businesses, such as grants for start-ups or tax breaks for R&D or capex.”

Asia-Pacific and South American economies also demonstrate strong capital investment levels

UHY adds that several Asian and South American countries feature highly for capital investment levels. Bangladesh has seen the greatest overall increase in gross capital formation over five years, investing 86.2% more in 2015 than it did in 2010 (USD56.4bn – or 27.3% of its GDP).

UHY says Bangladesh is investing heavily in areas such as power generation, resulting in nearly 80% of the population having access to power, up from 47% in 2009 – which will significantly benefit businesses.

In Central and South America, Guatemala, Uruguay, Peru and Argentina have all seen increases in capital investment above the world average over the five years studied.

Hugo Gubba, of UHY member firm UHY Gubba & Asociados in Uruguay says, “Rising capital investment in Uruguay has been driven both by more public projects, which include the possibility of public-private participation, and a variety of recent tax incentives.”

“Tax breaks approved in the past few years are designed to encourage business investment covering a whole host of areas – from construction to power generation, tourism to agriculture and biotech to call centres.”

“There is still further to go to improve Uruguay’s highways and railroads, so the country is in a better shape to promote our economy to foreign countries and attract more foreign direct investment.”

UK and Ireland buck downward European trend

The UK and Ireland have both bucked the trend of declining European capital investment. The UK increased its levels by 30% over the five-year period to USD503bn – equivalent to 17.6% of its GDP. This is likely to be due, in part, to the strong recovery from low levels brought about by the recession and credit crunch.

The Republic of Ireland has seen an even greater increase of 60% to USD61.4bn, or 21.7% of GDP.

As Alan Farrelly, Partner at UHY member firm UHY Farrelly Dawe White Limited in Ireland explains, “As well as initiating a number of key transport projects, supporting business growth and development is an area of high focus for the Irish government’s capital investment programmes.”

“Bodies like Enterprise Ireland, which provides assistance to Irish firms hoping to export through programmes to drive innovation and exploit market opportunities, and IDA Ireland,which attracts overseas companies to establish themselves in Ireland, help enable businesses to invest for growth.”

Table 1: Gross Capital Formation – change since 2010


Table 2: Gross Capital Formation – as a percentage of Gross Domestic Product (GDP)

*2010-2015 Gross Capital Formation. Source: World Bank & German Statistical Office **Source: World Bank

Notes for Editors

UHY press contact: Dominique Maeremans on +44 20 7767 2621


Nick Mattison or Peter Kurilecz

Mattison Public Relations

+44 20 7645 3636, +44 7860 657 540 or email

About UHY

Established in 1986 and based in London, UK, UHY is a leading network of independent audit, accounting, tax and consulting firms with offices in over 325 major business centres across more than 95 countries.

Our staff members, over 7,850 strong, are proud to be part of the 16th largest international accounting and consultancy network. Each member of UHY is a legally separate and independent firm. For further information on UHY please go to

UHY is a member of the Forum of Firms, an association of international networks of accounting firms. For additional information on the Forum of Firms, visit

BRIC economies outpace G7 by over a third in attracting inflows of foreign direct investment...



• FDI into BRIC economies up 59% in five years

ASEAN economies win FDI worth 5% of GDP

BRIC economies are outpacing the G7 by more than a third (35%) when it comes to attracting foreign direct investment (FDI), according to a new study by UHY, the international accounting and consultancy network.

According to UHY, total inflows of FDI accounted for 2.3% of the total BRIC nations’ GDP last year. This figure compares to 1.7% of GDP for the G7 and the world figure of 2.2% of total GDP.

Countries are keen to win FDI because it helps power economic growth. As well as boosting job creation and tax revenues, it can act as a spur to competitiveness and productivity through knowledge transfer or investment in improved processes, technologies or infrastructure.

The UHY study looked at FDI inflows last year in 45 major economies around the world, measuring how successful they have been in attracting FDI compared to their GDP. 

Brazil attracted FDI equivalent to 4.2% of its GDP in 2015 and China 2.3%. They also had the third and second largest amounts of FDI in absolute terms (USD 75billion and USD 250billion in total respectively) after the USA (USD 379billion in total).


BRICs economies received total FDI in 2015 of $375 billion – a 59% increase on five years ago in 2010 when the figure was $236 billion.

In this five-year period, China’s absolute total more than doubled – in 2010 it attracted USD 115billion in FDI.

UHY says that BRIC economies are seen as providing better growth opportunities for multinational businesses than the more mature economies of the G7.

In addition, the shift towards locating production facilities in BRIC economies rather than in western countries continues. This is particularly true in countries such as China, where low labour costs, availability of resources and a favourable business climate are key drivers.

Other emerging markets, such as Romania, are also seeking ways to attract more FDI. At the start of 2017, for example, it created a new institution, InvestRomania, to assist foreign companies wanting to invest in the country. However, tax measures introduced by the new government may have a greater impact on consumers than on increasing FDI.

However, Russia saw only 0.5% FDI as a share of its economy (USD 6.5billion in total), as sanctions continue to impact the economy and geo-political tensions deter potential business investment.

Of the G7, Japan and Italy saw the lowest performance with 0% and 0.7% respectively. Germany was also well below the average with just 1.4% (USD 46billion in total). Overall, Europe saw FDI worth 2% of total GDP, slightly below the global average of 2.2% of total GDP.

UHY says that this is likely to be due, in part, to complex company formation processes in Germany which can discourage certain types of foreign investment.

The UK is also lagging well behind the global average, attracting FDI worth just 1.8% of GDP (USD50billion in total) in 2015. Uncertainty following the UK’s Brexit referendum could deter multinational businesses and other foreign investors from investing in the country in the future.


ASEAN economies (Association of South East Asian Nations) outperformed even the BRIC nations in terms of FDI as a share of their economies, attracting FDI worth 5.3% of GDP.

Singapore won FDI worth 22.3% of its GDP (a total of USD 65billion) – likely to be largely due to its status as a significant financial centre allowing it to draw in huge flows of capital as more wealth is created across South East Asia.

Cambodia and Vietnam also performed strongly (9.4% and 6.2% respectively), as they are seen as locations of choice for businesses offshoring production and keen to look beyond China as a destination.

UHY says that the establishment of this new economic community last year is likely to give overseas businesses and other investors increasing confidence about investment prospects as they look to rationalise their operations following the lowering of trade and employment barriers in the region.

Comments Bernard Fay, Chairman of UHY: “Despite the slowdown in emerging markets, BRIC economies are continuing to attract significant amounts of FDI – while the G7 is falling behind.”

“Inbound investment by foreign businesses is a sign of confidence in an economy, providing a boost to business growth, job creation and developments in areas such as innovation and infrastructure.”

“Countries such as China in particular have for some time now been highly focussed on fostering an environment that encourages foreign investment.”

“In Brazil, although the strong economic growth of a few years ago has slowed, the current outlook for economic growth is positive with a strong internal market, the growth of which will be further enhanced by strong levels of FDI.”

“G7 economies could benefit from making themselves more attractive locations for foreign investment. One way to do this would be to make their tax regimes more favourable, by lowering corporate tax rates or introducing other incentives for multinationals to establish or expand operations there.”

“ASEAN nations are also punching well above their weight when it comes to winning high levels of FDI relative to the size of their economies. As this burgeoning economic community develops, this could further strengthen investor sentiment in South East Asia. ”

Ella Zhu, partner at UHY member firm, ZhongHua Certified Public Accountants LLP, in China says, “China’s commitment to creating a more open market means they have led the way among developing nations in FDI for two decades now.”

“As the political and legal environment has improved, more multinational companies and foreign businesses have been investing in high-tech, manufacturing and service industries. Since this approach has effectively promoted continuous, fast and healthy development of the national economy, it is unlikely to change in order to keep FDI strong. ”

Hara Nobuyuki, of UHY member firm UHY Tokyo & Co. in Japan says, “FDI in Japan has remained flat since the financial crisis and the Tohoku earthquake disaster, but the government has ambitious plans to double inward FDI stock to 35 trillion yen by 2020.”

“Key to this is the Japan Revitalisation Strategy, which aims to attract inward investment to Japan in a variety of ways. For instance, it will provide incentives, such as tax breaks, fundraising assistance and improvements in patent processes and costs, for new headquarters and R&D bases established here by multinational companies.”

Malta saw the highest FDI as a share of GDP in the study at 25.8% (USD 2.5billion in total), as the island continues to take advantage of its location at the crossroads of Europe, Africa and the Middle East to become an international centre for banking and attract substantial inflows of capital.


inflow of FDI pdf 4


inflows gross domestic product pdf


Notes for Editors

UHY global press contact: Dominique Maeremans on +44 20 7767 2621


Nick Mattison or Peter Kurilecz

Mattison Public Relations

+44 20 7645 3636, +44 7860 657 540 or email

About UHY

Established in 1986 and based in London, UK, UHY is a network of independent audit, accounting, tax and consulting firms with offices in over 320 major business centres across more than 90 countries.

Our staff members, over 7,600 strong, are proud to be part of the 16th largest international accounting and consultancy network. Each member of UHY is a legally separate and independent firm. For further information on UHY please go to

UHY is a full member of the Forum of Firms, an association of international networks of accounting firms. For additional information on the Forum of Firms, visit