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New York, USA, July 06, 2023-/African Media Agency(AMA)/Foreign direct investment (FDI) flows to Africa fell to $45 billion in 2022 from a record high of $80 billion reached in 2021, said the United Nations Conference on Trade and Development (UNCTAD).
These flows to Africa represented 3.5% of foreign direct investment in the world, specifies the UN agency in the Report on investment in the world 2023 published on Wednesday.
The number of new project announcements increased by 39% to 766. Six of the top 15 greenfield investment megaprojects (worth more than $10 billion) announced in 2022 were in Africa.
In North Africa, Egypt saw FDI more than double to $11 billion, due to increased cross-border M&A sales.
The number of new projects announced more than doubled to 161. The value of international project finance deals increased by two-thirds to $24 billion. Flows to Morocco fell slightly, by 6%, to $2.1 billion.
World Bank/John Hogg – A worker wearing a mask repairs a wheel of a giant haul truck at a uranium mine in Namibia.
Stable flows to Senegal
In West Africa, Nigeria caused negative FDI flows, at -187 million dollars, following share sales. Announced creative projects, however, rose 24% to $2 billion. Flows to Senegal remained stable at $2.6 billion. FDI flows to Ghana fell by 39% to $1.5 billion.
In East Africa, flows to Ethiopia fell 14% to $3.7 billion; the country remained the second largest recipient of FDI on the continent. FDI to Uganda increased by 39% to $1.5 billion, driven by investments in extractive industries. FDI to Tanzania increased by 8% to $1.1 billion.
Oil fields and mining in the DRC
In Central Africa, FDI in the Democratic Republic of Congo remained stable at $1.8 billion, with investment supported by flows to offshore oil fields and mining.
In Southern Africa, flows returned to previous levels after the abnormal peak in 2021 caused by a major corporate reconfiguration in South Africa. FDI in South Africa amounted to $9 billion – well below the 2021 level, but twice the average for the past decade. Cross-border mergers and acquisitions in the country reached $4.8 billion, up from $280 million in 2021. In Zambia, after two years of negative values, FDI increased to $116 million.
Four growing regional economic groupings
Over the past five years, FDI flows have increased in four of the continent’s regional economic groupings.
FDI in the Common Market for Eastern and Southern Africa increased by 14% to $22 billion. Flows also increased in the Southern African Development Community (quadrupling, to $10 billion), the West African Economic and Monetary Union (doubling, to $5.2 billion) and the Community of East Africa (9% increase to $3.8 billion).
Intraregional investment has remained relatively low, despite an increase over the past five years. In 2022, announcements of new intra-regional projects accounted for 15% of all projects in Africa (2% by value), up from 13% (2% by value) in 2017.
However, by value, three-quarters of announced projects in which only African multinational companies invest were on the continent.
In 2022, the largest increase in greenfield project announcements is in energy and gas supply (at $120 billion from $24 billion in 2021). The value of construction and mining projects also increased, to $24 billion and $21 billion, respectively. The information and communication sector registered the highest number of projects.
International project finance transactions targeting Africa recorded a 47% decline in value ($74 billion, compared to $140 billion in 2021), but a 15% increase in the number of projects, which amounted to at 157.
European investors remain by far the largest holders of FDI stocks in Africa, led by the United Kingdom ($60 billion), France ($54 billion) and the Netherlands ($54 billion). dollars).
Distributed by African Media Agency (AMA) for UN Info.
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Source : African Media Agency (AMA)