FDI in sub-Saharan Africa up 25%

Foreign Direct Investment into sub-Saharan Africa in 2011 was up 25% despite the global economic crisis, Unctad head of research and information, Jorge Maia, said in Johannesburg last week. Worldwide foreign direct investments (FDI) in 2011 surpassed the pre-crisis average and FDI inflows were up across developed, developing and transition economies, Maia said at the launch of the UN Centre for Trade and Development World Report on Foreign Direct Investment 2012. Africa however has seen a drop in FDI flows for the third year running, due in most part to divestments from North Africa, he added. Overall though, prospects for Africa are brightening, with the FDI inflow into sub-Saharan Africa recovering to $37 billion, up by 25%, he added. South Africa was the second-highest African recipient of FDI in 2011 behind Nigeria, with $5.8 billion compared to $1.2 billion in 2010. This represents 13.6% of Africa’s inflows.The $5.8 billion foreign direct investment represents 7.5% of overall fixed investment in SA in 2011. The top five African recipients of FDI in 2011 were dominated by oil/gas producers, South Africa being the exception. The report added that many countries, including South Africa, continued to liberalise and promote foreign investment in various industries to stimulate growth in 2011. Greenfield developments remain dominant, but mergers and acquisitions drove the 2011 growth. For the future the report says that sovereign wealth funds (SWFs) show significant potential for investment in development. “SWFs can work in partnership with host-country governments, development finance institutions or other private sector investors to invest in infrastructure, agriculture and industrial development, including the build-up of green growth industries. CAPTION Jorge Maia … ‘FDI inflows were up across developed, developing and transition economies.’