Foreign Direct Investment Into Africa Topped $50B In 2012

Foreign Direct Investment in Africa
Nigeria, Angola and South Africa are top investment destinations in Africa

AFRICANGLOBE – In 2012 and for the first time ever, developing economies received more Foreign Direct Investment (FDI) than developed countries, accounting for 52% of global FDI flows, according to the latest 2013 World Investment Report (Pdf).

This is partly because the biggest fall in FDI inflows occurred in developed countries, which now account for only 42% of global flows.

Africa bucked the trend with a 5% increase in FDI inflows to $50 billion, although global figures fell by 15 percent. This growth was driven partly by FDI in extractive industries, but investment in consumer-oriented manufacturing and service industries is also expanding.

A modest increase in FDI flows to landlocked developing countries (LLDCs) occurred, thanks to rising flows to African and Latin American LLDCs and several economies in Central Asia.

In a related development, Ghana’s Deputy Minister for Trade and Industry, Nii Lantey Vanderpuye, has advocated for a South-South Co-operation by ECOWAS countries to enable their economies move up the global value chain.

“Countries in the sub-region should engage in intra-trading activities”, Mr Vanderpuye said, adding that this would help attract foreign direct investments.

The Deputy Minister made the call when he officially launched the World Investment Report 2013 in Accra, yesterday.

The report, titled: ‘Global Value Chains: Investment and Trade for Development’ is a United Nations (UN) annual report that focuses on trade in Foreign Direct Investments (FDI). It identifies challenges on foreign direct investment and proffers solutions on them.

Mr Frank Van Rompae, a representative of the United Nations International Development Organisation (UNIDO) said FDI in developing countries was dominated by young and smaller entrepreneurial firms who encountered a lot of challenges.

Mr Rompae indicated that Ghana could move up the global value chain if it made manufacturing central in stimulating FDI.

He cited bureaucracy, high cost of production and over regulation as a source of worry to investors.

He stressed the need to export manufactured goods to other regions of the world to stimulate inflows.

The Director of Research for the Ghana Investment Promotion Centre (GIPC), the agency that handles investments into Ghana, Mr Kofi Antiri, noted that land acquisition, power outages and unskilled workforce were some of the challenges that confronted the investor.

Mr Antiri, however, assured investors of robust incentives, adding that FDI should yield tangible results that would ensure strategic investment and have an impact on economic indicators.

 

By: Anthony Sedzro