UNCTAD's World Investment Report 2023 published on 5 July showed that Egypt saw foreign direct investment (FDI) more than double to $11bn as a result of increased cross-border merger and acquisition (M&A) sales. However, FDI flows to Africa declined to $45bn in 2022 from the record $80bn set in 2021. They accounted for 3.5% of global FDI. The number of greenfield project announcements rose by 39% to 766. Six of the top 15 greenfield investment megaprojects (those worth more than $10 billion) announced in 2022 were in Africa. Announced greenfield projects more than doubled in number, to 161. International project finance deals rose in value by two-thirds, to $24bn billion. Flows to Morocco decreased slightly, by 6%, to $2.1bn. In West Africa, Nigeria saw FDI flows turn negative to -$187m as a result of equity divestments. Announced greenfield projects, however, rose by 24% to $2bn. Flows to Senegal remained flat at $2.6bn. FDI flows to Ghana fell by 39% to $1.5bn. In East Africa, flows to Ethiopia decreased by 14% to $3.7bn; the country remained the second largest FDI recipient on the continent. FDI to Uganda grew by 39% to $1.5bn on investment in extractive industries. FDI to Tanzania increased by 8% to $1.1bn. In Central Africa, FDI in the Democratic Republic of the Congo remained flat at $1.8bn, with investment sustained by flows to offshore oil fields and mining. In Southern Africa, flows returned to prior levels after the anomalous peak in 2021 caused by a large corporate reconfiguration in South Africa. FDI in South Africa was $9bn – well below the 2021 level but double the average of the last decade. Cross-border M&A sales in the country reached $4.8bn from $280m in 2021. In Zambia, after two years of negative values, FDI rose to $116m. Four regional economic groupings see growth Over the past five years, FDI inflows have risen in four of the regional economic groupings on the continent. FDI in the Common Market for Eastern and Southern Africa grew by 14% to $22bn. Flows rose also in the Southern African Development Community (quadrupling, to $10bn), the West African Economic and Monetary Union (doubling, to $5.2bn) and the East African Community (up 9%, to $3.8bn). Intraregional investment remained relatively small, despite an increase over the past five years. In 2022, intraregional greenfield project announcements represented 15% of all projects in Africa (2% in terms of value), as compared with 13% (2% in value) in 2017. However, looking at announced projects invested in by only African multinational enterprises, three-quarters of their value remained on the continent. In 2022, the biggest increase in announced greenfield projects was in energy and gas supply to $120bn from $24bn in 2021. Project values in construction and extractive industries also rose, to $24bn and $21bn, respectively. The information and communication sector registered the highest number of projects. International project finance deals targeting Africa showed a decline of 47% in value to $74bn, down from $140bn in 2021, but a 15% increase in project numbers, to 157. European investors remain, by far, the largest holders of FDI stock in Africa, led by the United Kingdom with $60bn, France with $54bn, and the Netherlands with $54bn.
