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Severe fall in foreign direct investment in Africa

18.06.2018

 | Source:  FinancialAfrik

In 2017, Africa attracted only $ 42 billion, a decline of 21% compared to 2016. A stronger contraction in Southern Africa and Angola, but which does not spare Africa either Central and West Africa.

According to the report of the United Nations Conference on Trade and Development (UNCTAD) on investment in the world in 2018, this drastic decline is linked to the lingering effects of the recession of the commodities sector.

The document published Wednesday in Geneva also does not close the door to hope: “The beginnings of a restoration of commodity prices, as well as the progress in inter-regional cooperation following the signing of the continental African free trade agreement could foster greater FDI flows to Africa in 2018, provided the global context remains favorable, “said James Zhan, Director of the Investment and Enterprise Division of the World Trade Organization. UNCTAD.

By region, the decline in FDI is more pronounced in southern Africa (fall of 66% to 3.8 billion dollars) leaded by South Africa and its political uncertainties. FDI flows have even become negative in a country like Angola which has transferred more funds abroad than it has received. For its part, Central Africa has a drop of 22% of FDI flows to 5.7 billion dollars. Until then spared by bad statistics, West Africa is experiencing a contraction of 11% of FDI to $ 11.3 billion due, among other things, to the Nigerian depression. The West African giant is down 21% of FDI that reached $ 3.5 billion.

These figures from the UNCTAD report show that there is too much volatility in incoming investment flows in Africa and their heavy reliance on the extractive system.

Source: FinancialAfrik