According to a report by global research company specializing in Africa and the Middle East, Infomineo, there was a 17 per cent increase in the number of Fortune 500 companies entering the Middle East Africa (MEA) region in 2016 compared to 2015.
Johannesburg is the leading destination of choice in Africa for Fortune 500 companies.
The Infomineo analysis includes the most commonly chosen cities and the factors which influence the selection of a region, country and city- each element revealing the dynamic growth patterns and the companies’ trend as they establish a footprint within the region.
It focuses on countries looking at entering or already present in MEA.
The Middle East Africa (MEA) region has become increasingly important for multinationals, Infomineo reports.
In 2016, a total of 196 Fortune 500 companies established dedicated regional headquarters in the MEA.
Other attractive cities for multinationals in Africa include Casablanca, Nairobi and Lagos. Nairobi is the leading destination for the FMCG companies and organizations looking to service Eastern Africa while Casablanca has the highest growth rate overall.
At the lower end of the spectrum are Cairo, Algiers and Cape Town. Cairo lags behind due to the political instability in Egypt but it has seen a 250 per cent increase in Fortune 500 investment since 2015.
Industry type plays a pivotal role in an organization’s the selection of city and country. Technology companies are more inclined towards Casablanca or Lagos.
Organizations looking to manage operations across Western Africa pick Lagos as their premier location. There are 12 Fortune 500 companies established in Lagos.
Other factors that are considered include the local market potential, maturity of the industry, existing competitors, political stability and quality of the employment market which assure the multinationals of a stable and profitable investment.
Germany and France lead in terms of coverage rate while China has the lowest presence in the region.
Dubai is the most attractive hub in the Middle East with 138 companies establishing a dedicated entity in the city.