INVESTIGATION: Nigeria Not Among Top 10 African Countries With Highest Foreign Direct Investments

By TheDispatch

Nigeria is no doubt one of the most attractive FDI destinations in Africa but unfortunately it is not among the countries with the highest number of foreign direct investments in recent years.

According to the International Monetary Fund, foreign direct investment positions in Africa decreased slightly from 2019, mostly driven by lower positions in Nigeria.

Africa as a continent is now seen as the “next frontier” for economic growth and development.

The continent is gradually becoming a hotspot for Foreign Direct Investments (FDIs).

Africa is rich in natural resources, youthful demographics, and untapped markets, and is now attracting a growing number of international investors.

However, according to a report put out by the United Nations Conference on Trade and Development (UNCTAD), on the 5th of July 2023, titled, ”World Investment Report 2023” Africa has experienced a steep decline in the value of FDIs intended for the emerging continent.

The report shows that foreign direct investment (FDI) flows to Africa decreased from a record $80 billion in 2021 to $45 billion in 2022.

They represented 3.5% of all FDI worldwide.

Greenfield project announcements increased by 39% to a total of 766.

Africa was home to six of the top 15 greenfield mega projects (those costing more than $10 billion) that were announced in 2022.

The report also notes that the deficit has increased from $2.5 trillion in 2015, when the SDGs were established, to around $4 trillion annually.

A quick rundown on the report shows that In North Africa, Egypt saw FDI more than double to $11 billion as a result of increased cross-border merger and acquisition (M&A) sales.

Nigeria saw FDI flows turn negative to -$187 million as a result of equity divestments. FDI flows to Ghana fell by 39%.

In East Africa, flows to Ethiopia decreased by 14%, and the country remained the second-largest FDI recipient in the sub-Saharan region. FDI to Uganda grew by 39%.

The countries with the highest foreign direct investments mentioned in the report are:
1. Egypt $11 billion
2. South Africa $9 billion
3. Ethiopia $3.7 billion
4. Senegal $2.6 billion
5. Morocco $2.1 billion
6. Democratic Republic of Congo $1.8 billion
7. Ghana $1.5 billion
8. Uganda $1.5 billion
9. Tanzania $.1.1 billion
10. Zambia $116 million

Unfortunately, Nigeria is not listed among the top 10 countries with highest number of foreign direct investments.

One of the reasons for this could be corruption, which is a serious obstacle to Nigeria’s economic growth and is often cited by domestic and foreign investors as a significant barrier to doing business.

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