Africa, one of few places in the world still experiencing positive growth, holds huge potential for investors seeking new and profitable ventures amid a recession in most developed countries.
"I think the continent is seen as providing at least a more positive investment environment than many other places in the world," said Ngozi Okonjo-Iweala, a World Bank managing director.
Speaking to AFP on the sidelines of the World Economic Forum in Cape Town, Okonjo-Iweala said despite considerable capital outflows during the global recession, investors were keen to come back to Africa.
Investment potential was however being handicapped in many countries by poor infrastructure, bureaucracy, labour inflexibility and lack of political stability.
But Africa was the world's fastest growing region for foreign direct investment in 2008, topped by countries such as South Africa, Morocco, Egypt, Algeria and Tunisia, according to the Financial Times FDI Outlook.
Those frontier markets appear to be suffering most from reduced FDI since the global crisis, according to the International Monetary Fund, but new investors from countries like China and India are stepping in.
"The height of the foreign capital inflow was about 53 billion dollars in 2007 and that has fallen quite dramatically for 2008," said Marilou Jane D Uy who deals with African finance at the World Bank.
Many institutional investors, such as hedge funds, seem to be returning as the continent exceeded world growth in recent years, growing at unprecedented rates of 5.7 percent in 2008 and six percent the previous year.
Global growth this year is expected to fall to a 20-year low of two percent, according to the United Nations.
Despite the slowdown, many countries especially in north and east Africa are still faring well, with east Africa as a region expected to record 3.8 percent growth.
Southern Africa is the only region expected to enter recession with powerhouse South Africa shrinking by 6.4 percent in the first quarter of 2009.
"If you look on average, Africa's economies have been growing, and have been growing at a higher rate than the rest of the world," said Omari Issa, chief executive of the Investment Climate Facility for Africa (ICF).
Logistical problems still need to be streamlined -- getting a container from Kigali in Rwanda to Mombasa in Kenya is several times more expensive than getting it to Europe, he noted.
"Investors will look at Africa as an opportunity but if the environment is not conducive they will walk away. However if they come and find the business environment is friendly they will stay and attract others," he told AFP.
India and China have not shied away from investing in the continent, stepping in where western nations fear to tread.
In places such as Zambia, China rescued a mine that closed after Swiss investors pulled out and are pouring in 400 million dollars into reviving it.
Jian Jianqing, chairman of the board of the Industrial and Commercial Bank of China said in a WEF interview that with direct investment return of 24-30 percent compared to the average 16-18 percent in developed countries, the investment environment was only getting "better and better".
The ICBC, the world's largest bank, owns a 20 percent stake in South Africa's Standard Bank, and Jianqing said Africa was a "hotspot for investment".
He also cautioned however that lack of consistency of economic policies and currency devaluations posed investment risks.
China announced earlier this year that its African investment fund would be boosted by two billion dollars to snap up opportunities left by Western investors leaving the continent.