• Investment flows to Africa dropped by 44 per cent
United Nations Conference on Trade and Development (UNCTAD) said Nigeria saw its foreign direct investment (FDI) inflows regressed to a negative region of $187 million in 2022 owing to equity divestments even as Africa contributed 3.5 per cent of global flow in the year.

UNCTAD disclosed this in its World Investment Report 2023 published yesterday.

According to the report, FDI flows to Africa declined to $45 billion in 2022 from a record $80 billion in 2021.

This, it revealed, accounted for 3.5 per cent of global FDI.

According to UNCTAD, international project finance deals targeting Africa showed a decline of 47 per cent in value.

Announced Greenfield projects, however, rose by 24 per cent to $2 billion. Flows to Senegal remained flat at $2.6 billion, according to the report, while FDI flows to Ghana fell by 39 per cent to $1.5 billion.

The number of greenfield project announcements rose by 39 per cent to 766 with six of the top 15 greenfield investment megaprojects worth over $10 billion announced in 2022 and situated in Africa.

In North Africa, Egypt saw FDI more than double to $11 billion as a result of increased cross-border merger and acquisition (M&A) sales. Announced Greenfield projects more than doubled to 161 while international project finance deals rose in value by two-thirds, to $24 billion. Flows to Morocco decreased slightly, by six per cent to $2.1 billion.

In East Africa, flows to Ethiopia decreased by 14 per cent to $3.7 billion. The country remained the second-largest FDI recipient on the continent. FDI to Uganda grew by 39 per cent to $1.5 billion on investment in extractive industries. FDI to Tanzania increased by eight per cent to $1.1 billion.

Also, in Central Africa, FDI in the Democratic Republic of the Congo remained flat at $1.8 billion, with investment sustained by flows to offshore oil fields and mining.

In Southern Africa, flows returned to prior levels after the anomalous peak in 2021 caused by a large corporate reconfiguration in South Africa. FDI in South Africa was $9 billion – well below the 2021 level but double the average of the last decade. Cross-border M&A sales in the country reached $4.8 billion from $280 million in 2021. In Zambia, after two years of negative values, FDI rose to $116 million.

Over the past five years, FDI inflows have risen in four of the regional economic groupings on the continent. FDI in the Common Market for Eastern and Southern Africa grew by 14 per cent to $22 billion. Flows rose also in the Southern African Development Community (quadrupling, to $10 billion), the West African Economic and Monetary Union (doubling, to $5.2 billion) and the East African Community up by nine per cent to $3.8 billion.

The report further revealed that intraregional investment remained relatively small, despite an increase over the past five years. In 2022, intra-regional Greenfield project announcements represented 15 per cent of all projects in Africa (two in terms of value), as compared with 13 per cent (two per cent in value) in 2017.