FDI into Africa records third-time fall to $42.7b in 2011 – UN

Africa, for the third conservative time, has suffered a decline of foreign direct investment (FDI) inflows, the United Nations said July 5, 2012 in a report.

The World Investment Report (WIR) 2012 released by UN Conference on Trade and Development (UNCTAD) showed that FDI flows to Africa were at $42.7 billion in 2011, down from $53 billion in 2009 and $43.1 billion in 2010.

In terms of share in global FDI flows, the report said Africa’s position “diminished from 3.3% in 2010 to 2.8% in 2011” as FDI to the continent from developed countries falling sharply, leaving developing and transition economies to increase their share in inward FDI to the continent.

The fall of FDI into Africa during the year was mainly due to dropped inflows to North Africa as the region was hit by social and political unrest which deterred investors, according to the WIR.

“North Africa has traditionally been the recipient of about one third of inward FDI to the continent. Inflows in 2011 halved, to $7.69 billion, and those to the two major recipient countries, Egypt and Libya, were negligible,” the report stated adding that, “the negative growth for the continent as a whole was driven in large part by reduced flows to North Africa caused by political unrest and by a small number of other exceptions to a generally more positive trend.”

Inflows to sub-Saharan Africa, UNCTAD observed, recovered from $29.5 billion in 2010 to $36.9 billion in 2011, a level comparable with the peak in 2008 ($37.3 billion).

By Ekow Quandzie