Africa records $186.3b financial flows in 2012 – AfDB

…as remittances overtake ODA, FDIs for the first time

External financial flows into Africa hit a record of $186.3 billion in 2012 as remittances into the continent overtook foreign direct investment (FDI) and official development assistance (ODA).

Remittances amounted to $60.4 billion in 2012 compared with $56.9 billion in 2011, the African Development Bank noted in a new report. It was the first time remittances became the largest external financial source to Africa.

According to the 2013 African Economic Outlook (AEO), the flow of FDI, portfolio investment, ODA and remittances were the main source of financing for African countries along with tax revenues and those have quadrupled since 2001.

The financial flows to Africa were $158.3 billion in 2011.

“This strong performance partly stems from the strong recovery of direct and portfolio investment,” said the report which was launched at the just-ended 2013 AfDB Annual Meetings in Marrakech, Morocco.

The report estimated that FDIs into Africa was $49.6 billion and ODA, it was $50 billion in 2012. Portfolio investments was $26.3 billion end of 2012, it estimated.

It adds that external flows as a share of Africa’s gross domestic product (GDP) increased to 9.2% compared with 8.3% in 2011.

The AEO report expects total external financial flows into Africa to top $200 billion in 2013, about 9.5% of the continent’s GDP.

By Ekow Quandzie back from Marrakech, Morocco