Geneva, Switzerland, (04 July 2012)
Total foreign direct investment (FDI) inflows to Africa declined in 2011 for the third successive year, UNCTAD’s World Investment Report 20121 notes. But the drop – to a total of $42.7 billion – was largely caused by a fall in FDI channeled to North Africa. The report says that inflows to Egypt and Libya, which had been major recipients of FDI, came to a halt as result of protracted political and social instability in those countries.
In contrast, inflows to sub-Saharan Africa jumped from $29.5 billion in 2010 to $36.9 billion in 2011, a level comparable to the peak of $37.3 billion achieved in 2008. A rebound in FDI to South Africa accentuated that recovery.
The World Investment Report 2012, subtitled “Towards a New Generation of Investment Policies,” was released today.
Continuing rises in commodity prices and a relatively positive economic outlook for sub-Saharan Africa were among the factors contributing to the turnaround, the annual survey says. The top five African recipients of FDI in 2011 were dominated by oil-producing countries led by Nigeria (see figure 1). Major investment continued to flow into another significant African oil producer, Angola, but divestment and repatriated profits by transnational corporations rendered net inflows negative.
While African transnational corporations are growing in influence and activity, outward FDI from Africa was still limited in 2011, especially as outflows from two traditional outward investors, Egypt and Libya, were significantly reduced.
The region’s FDI prospects for 2012 are promising, as strong economic growth, ongoing economic reforms and high commodity prices have improved investor perceptions of the continent, the report says. One such indication is that in sub-Saharan Africa, excluding South Africa, net sales related to mergers and acquisitions – the purchase of African firms by foreign transnational corporations – over the first five months of 2012 more than doubled from the same period the previous year.
Full Report - http://unctad.org/en/PublicationsLibrary/wir2012_embargoed_en.pdf
Overview - http://unctad.org/en/PublicationsLibrary/wir2012overview_en.pdf
Figure 1 - Africa: top five recipients and sources of FDI inflows, 2010 and 2011
(Billions of dollars)
Source: UNCTAD, World Investment Report 2012
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