Seven of eight African countries surveyed recently by UNCTAD largely recovered in 2002 from a plunge in FDI inflows that paralleled the global FDI downturn in 2001. In these seven countries - Cameroon, Cape Verde, Chad, Gambia, Sierra Leone, Zambia and Zimbabwe - UNCTAD credits a combination of policy reforms and an improving global commodities market for the turnaround. Only Benin failed to register growth.
FDI inflows to Benin have been falling for three years. They plummeted from a 1992 peak of $78 million to just $1.4 million in 1993, before recovering to $61 million in 1999 and then settling at $41 million in 2002. The fluctuations were related to the country´s ongoing privatization programme, which has recently experienced a slowdown.
FDI inflows to Cameroon in 2002 were buoyed by oil projects in Chad. One part of these projects was the export pipeline passing through Cameroon to the Gulf of Guinea coast. As a result, inflows surged to the highest levels in almost a decade, from $31 million in 2000 to $87 million in 2002. The gains are one-off in nature, however, and are not expected to continue, according to UNCTAD.
Cape Verde may be regaining vitality in its FDI inflows after successive failures to correct for the declines that started in 1999. In 2002, those inflows rose to $14 million, up from $9 million in 2001. Further liberalization may help future prospects.
Chad became one of Africa´s top 10 FDI performers in 2002, with inflows soaring from about $27 million in 1999 to $901 million in 2002. Ongoing oil projects in the Doba Basin of Lake Chad account for a large part of the sudden surge.
Compared to other African countries of similar size, Gambia has performed quite well over the past decade. In the last four years alone - 1999 to 2002 - its FDI inflows reached their highest levels ever, consistently above $35 million. These good performances were related to investments in the tourism sector and other downstream activities. UNCTAD believes that the trend is likely to continue in the light of further reforms planned or under way.
With the end of major conflicts in the country, Sierra Leone´s FDI inflows began to regain momentum in 2002, climbing to $5 million from $3 million in 2001. Recent overall performance, however, is still far from pre-conflict levels.
Zambia is also enjoying a comeback in its FDI inflows, following a losing streak that began in 1998. Part of the rebound was due to activities in the mining industry, particularly copper. Copper prices rose sharply on international commodities markets, making the mineral profitable for international investors.
In Zimbabwe, reforms that have been less than smooth triggered a dramatic plunge in FDI inflows, although a slight recovery was recorded in 2002. After hitting their highest level - $444 million - in 1998, inflows tumbled to $4 million in 2001 but by 2002 had recovered smartly, to $26 million.
National investment profiles are being published online as they become available, based on each country´s reporting schedules. The profiles, which are part of UNCTAD´s World Investment Directory, provide quick electronic access to the latest statistics on foreign direct investment (FDI) and the operations of transnational corporations (TNCs). They include statistical definitions and sources, a listing of relevant national laws and regulations, information on bilateral and multilateral agreements and a bibliography.
