FDI flows to Africa
slumped to $42 billion in 2017,
a 21% decline from 2016, the World Investment
Report 2018 issued by UNCTAD.
Weak oil prices and harmful lingering
effects from the commodity bust saw flows contract, especially in the larger
FDI inflows to diversified exporters,
including Ethiopia and Morocco, were
relatively more resilient. FDI flows to North Africa
were down 4% to $13 billion.
Investment in Egypt
was down, but the country continued to be the largest recipient in Africa. FDI into Morocco was up 23% to $2.7 billion,
including as a result of sizeable investments in the automotive sector.
FDI flows to Central
Africa decreased by 22% to $5.7 billion. FDI to West Africa fell
by 11% to $11.3 billion, due to Nigeria’s
economy remaining depressed.
FDI to Nigeria fell 21% to $3.5 billion.
East Africa, the fastest-growing region in Africa,
received $7.6 billion in FDI in 2017,
a 3% decline from 2016.
Ethiopia absorbed nearly half of this amount, with $3.6
billion (down 10%), and is now the second largest recipient of FDI in Africa.
Kenya saw FDI increase to $672 million, up 71%, due to
strong domestic demand and inflows into information and communication
technology (ICT) sectors.
In Southern Africa,
FDI declined by 66% to $3.8 billion. FDI to South Africa fell 41% to $1.3
billion, due to an underperforming commodity sector and political uncertainty.
In contrast, FDI into Zambia
increased, supported by more investment in copper.
The beginnings of a commodity price
recovery, as well as advances in interregional cooperation through the signing
of the African Continental Free Trade Area agreement, could encourage stronger
FDI flows in 2018, provided the global policy environment remains supportive.