FDI to Africa held to earlier levels last year, despite an apparently dramatic rise from $9 billion in 2000 to $17 billion in 2001, says the World Investment Report 2002(1), released today by the United Nations Conference on Trade and Development (UNCTAD). Most of that increase is due to a few large investment deals in South Africa and Morocco (figure); for many other countries on the continent inflows fluctuated only slightly, although they were higher than in the early 1990s.
Flows to North Africa were marked by an unprecedented growth of 83%, to $5.3 billion. However, the lion´s share was due to Morocco, where flows rose from $200 million in 2000 to almost $2.3 billion last year, mainly the result of local telecom operator Maroc-Télécom’s sale of a 35% stake to France´s Vivendi Universal.
In sub-Saharan Africa, flows surpassed the $10-billion mark for the first time ever, reaching $11.8 billion in 2001. This is largely the result of an unbundling of cross-share holdings involving London-listed Anglo American and De Beers of South Africa. Without that transaction, nothing much would have changed in the subregion as a whole, where the increase was almost identical to the rise in flows to South Africa. Behind South Africa, two oil-producing countries – Angola and Nigeria – ranked next in terms of absolute inflows. The group of the next largest FDI recipients – all of which receive more than $200 million, led by Côte d´Ivoire with $257 million – also includes three least developed countries (LDCs): Mozambique, Tanzania and Uganda.
FDI flows into the 34 African LDCs last year climbed by some $600 million (or 16%), to almost $4.2 billion, but the increase was registered in only 19 of them. Three countries -- Angola, Mozambique and Sudan – together accounted for the lion’s share of the total increase. Angola, with $240 million (in petroleum-related FDI), saw by far the largest jump, to more than $1.1 billion, keeping its ranking as the largest FDI recipient among African LDCs.
Most of the FDI flows to Africa come from only a small number of home countries (table), led by the United States, France and the United Kingdom. During the period 1996-2000, the US alone accounted for more than 37% of total flows from developed countries, France for 18% and the UK for 13%; Germany and Portugal followed at some distance. Japan has been a relatively small investor since the early 1990s.
The primary sector is the largest recipient of accumulated FDI outflows to Africa, with a 55% share for the period 1996-2000. Service industries have become more important in recent years, with a 25% share. The industrial pattern of FDI outflows differs among individual home countries. In the case of the US, more than 60% of all outflows to Africa since 1996 were accounted for by oil and petroleum. In the case of the Netherlands, most FDI went into the primary sector, while most outflows from other home countries, such as Germany, Japan and United Kingdom, went into services. Transnational corporations (TNCs) from the UK were particularly active in banking, finance and trading, while German firms concentrated on construction and real estate.
1. The World Investment Report 2002: Transnational Corporations and Export Competitiveness (Sales No. E.02.II.D.4, ISBN 92-1-112551-0) is available for US$ 49, and at a special price of US$ 19 in developing countries and economies in transition, from United Nations Publications, Two UN Plaza, Room DC2-853, Dept. PRES, New York, NY 10017, USA, tel: +1 800 253 9646 or +1 212 963 8302, fax: +1 212 963 3489, e-mail: email@example.com, or Section des Ventes et Commercialisation, Bureau E-4, Palais des Nations, CH-1211 Geneva 10, Switzerland, tel: +41 22 917 2614, fax: +41 22 917 0027, e-mail: firstname.lastname@example.org; Internet: www.un.org.