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- Global Investment Trend Monitor report by UNCTAD estimates FDI flow of $49 billion
- Egypt, the top recipient of foreign investment inflows at $8.5 billion,
The recently released Global Investment Trend Monitor report by UNCTAD has estimated a three percent rise of FDI flows into Africa compared to the previous year. In 2019, Africa it says recorded an investment of $49 billion. However, UNCTAD cautions that “Persistent global economic uncertainty and the slow pace of reforms seeking to address structural productivity bottlenecks in many economies continue to hamper investment in the continent”.
Egypt remains as the top recipient of foreign investment inflows estimated at $8.5 billion, a five percent rise over 2018 largely due to the economic reforms that have boosted investor confidence especially in oil and gas, telecoms, tourism and real estate.
Out of the total FDI , about $8.8 billion worth of FDI flowed into East Africa with Ethiopia and Uganda accounting for more than half at $4.5 billion. Ethiopia’s share of FDI of $2.5 billion in 2019, was largely driven by deals between Addis Ababa and Beijing. However, it should be noted that Ethiopia witnessed a fall in FDI flows for the third consecutive year from $3.3 billion in 2018 and $4.02 billion the year before. On the other hand, Uganda’s share went up to $2.0 billion from $1.34 billion a year earlier. The FDI flows into Uganda were largely driven by the investment from Total (France), CNOOC (China) and Tullow Oil (UK) into the development of oil fields and pipeline. On the whole, the estimated FDI of $8.8 billion, in Eastern Africa shows a decline from $9 billion in 2018.
Kenya enjoyed preference by foreign investors seeking to set up operations in Eastern and Southern Africa in the 1960s and 1970s. Of late it has lost its status to Ethiopia in FDI flows. Examining Kenya’s investment landscape, UNCTAD report pointed out that a considerable number of big-ticket investors have been discouraged by poor economic policies and inconsistent efforts at structural reforms, growing problems of corruption and governance, and the deterioration of public services since the 1980s in Kenya.
South Africa, rated as the continent’s most developed economy, attracted only $5 billion worth of foreign investments, while Nigeria’s shot up by 71 percent to $3.4 billion, riding on inflows into oil and gas sector. The UNCTAD analysts pointed out that Nigeria has achieved some investment diversification as seen in the development of a $600 million steel plant in Nigeria’s Kaduna state.
