The impact of the coronavirus disease (COVID-19) has hit global foreign direct investment so hard, the sector has collapsed in 2020 and it is expected to weaken further in 2021, according to the latest issue of the Global Investment Trends Monitor of the United Nations Conference on Trade and Development (UNCTAD).
The 38th edition of the Monitor copied to ghanabusinessnews.com Sunday January 24, 2021 indicated that global foreign direct investment (FDI) collapsed in 2020, falling by 42 per cent to an estimated $859 billion from $1.5 trillion in 2019. FDI finished 2020 more than 30 per cent below the trough after the global financial crisis in 2009 and back at a level last seen in the 1990s, it said.
The Monitor states that the decline in investments was concentrated in developed countries, where FDI flows fell by 69 per cent to an estimated $229 billion.
“Flows to Europe dried up completely to -4 billion, including large negative flows in several countries. A sharp decrease was also recorded in the United States (-49 per cent) to $134 billion,” it added.
It points out that the decline in developing economies was relatively measured at -12 per cent to an estimated $616 billion. The share of developing economies in global FDI reached 72 per cent– the highest share on record. China topped the ranking of the largest FDI recipients.
The Monitor notes that the drop in FDI flows across developing regions was uneven, with -37 per cent in Latin America and the Caribbean, -18 per cent in Africa and -4 per cent in developing countries in Asia. East Asia was the largest host region, accounting for one-third of global FDI in 2020. FDI to transition economies declined by 77 per cent to $13 billion, the Monitor said.
It states that looking ahead, the FDI trend is expected to remain weak in 2021.
The COVID-19 has infected more than 99 million in the world and killed some 2.1 million to-date according to the Johns Hopkins University.
By Emmanuel K. Dogbevi