Africa gets lion’s share of FDI

Foreign direct investment (FDI) flows to African countries increased by 5% to US$50 billion in 2012 even as global FDI fell by 18%, according to the annual survey of investment trends by the United Nations Conference on Trade and Development (Unctad). The World Investment Report 2013, subtitled Global Value Chains: Investment and Trade for Development, sees a revival in the continent’s industries “that aim at serving Africa’s growing consumer markets”. The exceptions are west and southern Africa. FDI flows to Southern Africa fell sharply, from $8.7 billion in 2011 to $5.4 billion in 2012. Inflows to South Africa dropped by 24% in 2012, to $4.6 billion. In Mozambique, however, inflows doubled to $5.2 billion to exploit the country’s huge offshore gas deposits. However, FDI outflows from South Africa rebounded sharply to $4.4 billion, returning the country to the position of largest source country of FDI in Africa. Investors are returning to North Africa after the area’s political turmoil in 2011, with FDI growth of 35% to $11.5 billion in 2012 – most of it in Egypt. Investment in West Africa declined by 5% to $16.8 billion, driven largely by a 21% drop in Nigerian FDI. Ghana remained stable at $3.3 billion. ‘Significant’ FDI was targeted at the expansion of the copper-cobalt Tenke Fungurume mine in the Democratic Republic of the Congo. Energy resources such as recently discovered gas reserves in the United Republic of Tanzania and oil fields in Uganda drew increased FDI to East Africa. As a result, inflows to the region expanded from $4.5 billion in 2011 to $6.3 billion in 2012. INSERTS 5% The increase in FDI flows into Africa 24% The decrease in FDI flows into South Africa