6. Innovation and technology

Many African cities have strong entrepreneurship, and several innovation sectors are performing well. Some cities are positioning themselves as centres of technology and research on the continent. The rise of mobile telephony and mobile banking is creating pockets of excellence, with Nairobi – Africa’s Silicon Savannah – emerging as a regional powerhouse in mobile technology. Elsewhere, Accra is witnessing strong growth in its ICT sector, while Addis Ababa is emerging as a hub for IT startups.

7. Increasing foreign direct investment (FDI)

International investor perceptions about potential opportunities in Africa are slowly improving. The global search for commodities, a growing internal consumer market and better macroeconomic fundamentals have helped to boost foreign investment. FDI volumes into sub-Saharan Africa have risen by 41% since 2007 (bettered only by Latin America), although volumes have fallen equally sharply in North Africa.

High flows from China have contributed to FDI growth as it seeks to tap into Africa’s natural resources and contribute to infrastructure development. Malaysian, Indian and South African investors are also active. FDI from developing countries is growing, as well as from private equity funds, and there is a shift towards FDI directed at African consumers. Nigeria has become Africa’s favoured location for investment as the continent’s largest consumer market.

8. Service sector growth

As Africa’s internal market expands, a huge requirement is building for personal banking services, business finance and microfinance. Currently, only one-quarter of the continent’s population has a bank account, presenting a significant growth opportunity. Retail banking in sub-Saharan Africa is expected to achieve 15% per year growth for the remainder of the decade.

New forms of banking, such as mobile banking, are emerging. This is being driven by platforms such as M-Pesa in Kenya, which is now used by a reported 70% of Kenya’s adult population. Similar systems have been set up throughout Africa, working with major banks such as South Africa’s First National Bank. Johannesburg will remain the continent’s leading financial centre. Casablanca, Lagos and Nairobi are consolidating their positions as regional banking hubs, while Port Louis (Mauritius) is evolving as an offshore banking centre.

9. Offshore jobs

In comparison with the more established offshoring markets in India, Central Europe and Southeast Asia, Africa is a relatively recent entrant to the offshoring sector. The continent has, however, seen a strong uptick in activity in recent years, driven primarily by its low-cost proposition, ready availability of talent, English and French language skills, and favourable time zones for Europe.

Johannesburg, Cape Town, Cairo and Casablanca have evolved as the leading cities in terms of a critical mass of offshore services, while Nairobi and Accra are also developing in this area. Several African governments, such as Ghana and Kenya, are making concerted efforts to improve the attractiveness of the operating environment by creating technology parks and developing their skills base.

10. Improving governance, economic management and transparency

In a global comparison of transparency indicators for property investment and operational environments in 97 countries, South Africa ranked 21st, ahead of its fellow BRICS members and alongside countries including Italy, Austria, Malaysia and Poland. The fact that South Africa ranked as the continent’s only “transparent” market underpins its reputation among global investors and corporate occupiers as the most desirable location to do business in Africa.

Business operating environments in Africa are selectively improving and economic governance is, in general, becoming more rigorous. Nonetheless, investors’ concerns about a wide range of risks persist, and Africa will remain a challenging balance of risk versus opportunity. Within sub-Saharan Africa , Accra (Ghana), Lusaka (Zambia), Dar es Salaam (Tanzania) and Maputo (Mozambique) are judged to have the region’s most favourable risk profiles. Combined with their high rates of economic growth, they provide among the continent’s most attractive environments for investors. Property markets in countries such as Ghana and Kenya are improving in transparency, and are already proving themselves to be suitable regional hubs from which to reach the significant East and West African production and consumer markets.

11. New infrastructure … new cities

Poor infrastructure (in terms of transport, utilities and telecommunications) remains one of the biggest challenges for the African continent, but investment funding is steadily increasing. China, in particular, has become a major source of funding that includes hydropower projects in Nigeria, roads and railways in the Democratic Republic of Congo, Mozambique, Tanzania, Kenya and Angola, and communications in Ethiopia. With many city infrastructures straining under the weight of rapid urbanisation, there are several ambitious plans for new satellite “cities” on the edge of Africa’s major cities, including Konza Techno City outside of Nairobi and Eko Atlantic on Victoria Island in Lagos.

12. Rapidly evolving commercial real estate market

Sub-Saharan Africa’s commercial real estate sector is in an early, high-energy phase of development as the industry starts to respond to rapid urbanisation and strong demand from businesses and consumers for a modern real estate infrastructure. Nonetheless, the continent remains severely undersupplied with high-quality commercial space, pointing to opportunities.

Commercial property in Africa is about to launch into a boom. Legislators across the continent need to focus on creating more transparent property rights and environments if city skylines are to keep pace with global interest and African ambitions.

Mark Bradford is managing director at JLL South Africa.

This article was first published by the World Economic Forum.