Africa, dubbed the “next frontier” for economic growth and development, is increasingly becoming a hotspot for Foreign Direct Investments (FDIs). This continent, which is rich in natural resources, has a young population, and undiscovered markets, is drawing an increasing number of international investors.
However, according to a study released on the 5th of July 2023 by the United Nations Conference on Trade and Development (UNCTAD) titled “World Investment Report 2023,” Africa has seen a dramatic fall in the value of FDIs destined for the rising continent.
According to the research, foreign direct investment (FDI) flows to Africa fell from a high of $80 billion in 2021 to $45 billion in 2022. They accounted for 3.5% of total global FDI.
The number of greenfield project announcements jumped by 39% to 766. Six of the top 15 greenfield megaprojects (those costing more than $10 billion) announced in 2022 were in Africa.
According to the analysis, the deficit has grown from $2.5 trillion in 2015, when the SDGs were adopted, to about $4 trillion yearly.
According to a concise summary of the research, Egypt saw FDI more than double to $11 billion as a result of increased cross-border merger and acquisition (M&A) transactions. As a result of equity divestments, Nigeria’s FDI flows fell to -$187 million. FDI into Ghana has decreased by 39%.
In East Africa, flows to Ethiopia fell by 14%, but the country remained the region’s second-largest FDI recipient. FDI into Uganda increased by 39%. To be more exact, the ten African countries with the largest foreign direct investment in 2022 are shown below.
PS: This list contains only countries mentioned in the report.
| Rank | Country | FDI |
|---|---|---|
| 1. | Egypt | $11 billion |
| 2. | South Africa | $9 billion |
| 3. | Ethiopia | $3.7 billion |
| 4. | Senegal | $2.6 billion |
| 5. | Morocco | $2.1 billion |
| 6. | Democratic Republic of Congo | $1.8 billion |
| 7. | Ghana | $1.5 billion |
| 8. | Uganda | $1.5 billion |
| 9. | Tanzania | $.1.1 billion |
| 10. | Zambia | $116 million |