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Egypt, Nigeria, S/Africa top list of African countries with highest FDI

Egypt, Nigeria, South Africa, Mozambique amongst others lead the list of African countries that have attracted the highest foreign direct investments in the past ten years. According to data obtained from the World Bank, the top 10 countries received over $300 billion Net FDI between 2011 and 2020. 

According to the Organisation of Economic Co-operation and Development (OECD), FDI is an integral part of an open and effective international economic system and a major catalyst to a country’s development.

A cursory look at the data revealed that Egypt received the largest influx of FDI during the period, a total of $56.2 billion, closely followed by Africa’s largest economy, Nigeria, with net FDI inflows of $45.1 billion. 

South Africa, a major competitor for FDI inflows in Sub Saharan Africa attracted a sum of $41.3 billion during the ten-year period, Mozambique followed with $37.17 billion.

Others include Ghana ($32.5 billion), Morocco ($27.1 billion), Congo Republic ($21.4 billion), Ethiopia ($20.8 billion), Democratic Republic of Congo ($13.59 billion), and Algeria ($12.4 billion).

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What happened in 2020?

A report on global investment trends by the United Nations Conference on Trade and Development shows that FDI flows to Africa declined by 18% to an estimated $38 billion in 2020, from $46 billion recorded in 2019.

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Economic impact

A cursory look at the GDP of the ten countries shows that seven of them recorded positive growth between 2011 and 2019, while three of them recorded contractions.

Africa’s FDI compared to other Continents

According to the report by UNCTAD, global FDI flows fell by as much as 42% in 2020 from about $1.5 trillion to an estimated $859 billion.

Outlook for 2021

The report, suggests that the FDI trend in 2021 is expected to remain weak, as projections point towards continued downward pressure.

It also asserts that risks related to the latest wave of the pandemic, the pace of rollout of vaccination and economic support packages, fragile macroeconomic situations in major emerging markets, and uncertainty about the global policy environment for investment will all continue to affect FDI in 2021.