FDI to Nigeria dips by 43%
Foreign direct investment, FDI, to Nigeria plunged by 43% with West Africa witnessing a 15% decline to $9.6 billion in 2018.
Nigeria’s FDI is now put at $2 billion.
The situation for the continent saw FDI up to US$46 billion in 2018, an increase of 11% on the previous year, according to UNCTAD’s World Investment Report 2019.
Growing demand for some commodities and a corresponding rise in their prices as well as the growth in non-resource-seeking investment in a few economies underpinned the rise.
“The African Continental Free Trade Area (AfCFTA) agreement will bolster regional cooperation. This, along with upbeat growth prospects, augurs well for FDI flows to the continent,” UNCTAD Secretary-General Mukhisa Kituyi said.
FDI flows to North Africa climbed by 7% to $14 billion.
Investments in Egypt contracted (down by 8% to $6.8 billion), but the country continued to be the largest FDI recipient in Africa.
FDI to Morocco increased by 36% to $3.6 billion on the back of sizeable investments in finance and the automotive sector.
FDI flows to Sub-Saharan Africa climbed by 13% to $32 billion, recovering ground after successive contractions in the two prior years.
Southern Africa saw the biggest turnaround, with flows recovering to $4.2 billion after net divestment of $925 million the previous year.
FDI in South Africa more than doubled to $5.3 billion, although this was largely attributable to intracompany transfers by established investors.
Angola remained negative (-$5.7 billion), mainly as a result of oil and gas firms transferring funds to parent companies through intracompany loans.
FDI held steady at $9 billion in East Africa, the fastest-growing region of the continent.
Ethiopia topped the region, even as flows to the country declined by 18%, to $3.3 billion.
Flows to Kenya swelled by 27% to $1.6 billion, due to investment in diverse sectors, including manufacturing, hospitality, chemicals and oil and gas.
Flows to Ghana also dipped, albeit by a more moderate 8%, to $3 billion.