Foreign investors are facing challenges in pricing assets in Africa as lack of data and a formal market weigh negatively on their plans to expand in the continent, a survey says.

It indicates that firms from abroad are increasingly facing difficulties in accessing accurate, up-to-date figures and relevant information about markets they intend to grow into, especially through mergers and acquisitions.

This is largely due to the absence of active formal markets. In some, thriving secondary markets and exchanges are not present or those established are so limited that valuers are unable to gain much use from them.

Other challenges listed are unavailability of local macroeconomic data and the quality of financial information provided.

The PricewaterhouseCoopers survey is titled Africa: A closer look at value.

“Interest in Africa as an investment destination has continued to grow, with the continent often viewed as an investment market with the potential for significant growth and superior returns. Assets on the continent remain difficult to value with large expectation gaps between buyers and sellers,” PwC’s southern Africa valuation and economics leader Jan Groenewald says.

The study echoes views of 77 financial analysts and corporate financiers in southern Africa (35), East Africa (19) and West Africa (23).

Pundits and corporate financiers cited lack of data as the most difficult challenge that investors face in finding comparable companies to offer appraisal benchmarks in a valuation analysis or industry data for financial analysis.

Despite such challenges, Africa continues to attract a high level of interest as an investment destination from the US, the EU, Brazil, Russia, India, and China as well as from within.