Egypt witnessed robust foreign direct investment inflows in 2016, boosted by the hydrocarbon sector, a recent report issued by the United Nations Conference on Trade and Development (UNCTAD) found. "Robust foreign direct investment inflows into Egypt drove a hike in inflows in North Africa. FDIs in Egypt rose 17% in 2016, to $8.1bn, topping inflows in the region," the report said. According to the report, this influx of FDIs came on the back of major hydrocarbon discoveries and investments in the oil and gas sectors, including Shell's Western Desert concession. In contrast, FDIs in Morocco, the second most attractive destination for investors in 2016, fell 29%, to $2.3bn. Egypt was one of the few nations that beat the downslide of FDIs continent-wide in 2016, with investments falling 3% to $59bn. On the regulatory side, the report took note of the passing of the Investment Act in 2017, which should incentivise investments, and the formation of the Supreme Investment Council. "Egypt established the Supreme Council for Investment, which will overlook the state's investment policies with a view of further improving the investment climate and facilitating investment. Moreover, in 2017, the country's parliament adopted a revised investment law providing, inter alia, for a one-stop shop and several investment incentives," the report said. Egypt saw a net FDI inflow of $6.6bn in the first three quarters of fiscal year (FY) 2016-17, mostly directed into the oil sector. The report also highlighted buying assets in Egypt. Barclay's UK, for example, sold its 150-year-old affiliate in Egypt to Morocco's Attijariwafa Bank for $500 million. UNCTAD noted also that Sudan has attracted non-hydrocarbon projects from Egypt (in total exceeding $1.2bn) in manufacturing (pharmaceuticals and cement) and electricity, as well as a $150m telecommunication project from Bahrain. FDI flows to Africa continued to decline in 2016, by a moderate 3% to $59bn. In contrast, sluggish commodity prices have diminished economic prospects in Sub-Saharan Africa and tempered investor interest in the region. Flows to Angola—the largest FDI recipient in the continent—were subdued. Despite some recovery from its 2015 lows, FDIs to Nigeria and South Africa remained well below past averages. Some diversified producers of East Africa registered strong FDIs in 2016, with Ethiopia attracting more inflows than ever before. Investment from developing economies are increasingly active in the continent, but those from developed countries still hold most of the foreign investment stock. Outward investment from Africa remained steady at $18bn in 2016, with higher outflows from Angola offsetting declines in FDIs from Nigeria and South Africa. FDI flows to Africa are likely to increase moderately in 2017 due to the modest oil price rises and a potential increase in non-oil FDIs.
