The Report indicates that the construction of an $850 million gold mining facility by American miner, Newmont Corporation and the construction of a cement factory by Moroccan company, Ciment d’Afrique (CIMAF) for $436 million contributed to the rise.
The Report says FDI in West Africa increased by 48 per cent to $14 billion. Nigeria saw its flows double to $4.8 billion, mainly because of the resurgence in oil investment and expansion in gas. International project finance deals in the country jumped to $7 billion, with some large projects in residential and commercial real estate. These included, for example, the $2.9 billion Escravos Seaport project, involving construction of an industrial complex with a refinery, international airport, industrial estate and free trade zone, it notes.
FDI flows to Africa reached a record high of $83 billion – from $39 billion in 2020, accounting for 5.2 per cent of global FDI.
“Most recipients saw a moderate rise in FDI after the fall in 2020 caused by the COVID-19 pandemic,” the Report said.
It further states that the total for the continent was inflated by a single intrafirm financial transaction in South Africa in the second half of 2021. Excluding that transaction, the increase in Africa is moderate, more in line with other developing regions.
It notes that Southern Africa, East Africa and West Africa saw their flows rise; Central Africa remained flat and North Africa declined. Flows to North Africa fell by 5 per cent to $9.3 billion. Egypt saw its FDI drop by 12 per cent as large investments in exploration and production agreements in extractive industries were not repeated, it added. Despite the decline, the country was the second largest host of FDI on the continent.
According to the Report, pledges from Gulf States to invest some $22 billion in various sectors may boost FDI going forward. Announced greenfield projects in Egypt more than tripled, to $5.6 billion; for example, Reportage Properties of the United Arab Emirates announced a real estate project for $1.5 billion.
Flows to Morocco rose by 52 per cent to $2.2 billion. A large international project finance deal was announced there: the $20 billion construction of a 3,800 km transmission line to the United Kingdom with 3.6 GW of capacity, sponsored by Xlinks a United Kingdom company, it says.
FDI to East Africa grew by 35 per cent to $8.2 billion. Flows to Ethiopia reached $4.3 billion. Chinese investments tripled in 2021 (Ethiopia is a central hub for China’s Belt and Road Initiative), the Report noted.
By Emmanuel K. Dogbevi
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