By Chinwendu Obienyi
The African continent recorded a total Foreign Direct Investment (FDI) of $38 billion in 2020, representing a drop of 18 per cent from $46 billion recorded in 2019.
Data obtained from the United Nations Trade Association (UNCTAD)’s investment trend monitor showed that Egypt continued to become the top destination for FDI in Africa despite the total inflow of $5.5 billion representing a whopping 38 per cent drop.
Nigeria on its own part attracted a total FDI of $2.6 billion in 2020 down from the $3.3 billion it attracted a year earlier while South Africa, a major competitor for FDI inflows in sub-Saharan Africa attracted less with $2.5 billion.
FDI inflows are mostly targeted at the real sector funding investments in infrastructural development, technological innovation, manufacturing, health care, and Agriculture.
“FDI flows to Africa declined by 18 per cent to an estimated $38 billion, from $46 billion in 2019. Greenfield project announcements, an indication of future FDI trends, fell by 63 per cent to $28 billion, from $77 billion in 2019. The pandemic’s negative impact on FDI was amplified by low prices and low demand for commodities.”
FDI inflows to sub-Saharan Africa decreased by 11 per cent to an estimated $28 billion, while inflows to Nigeria declined to $2.6 billion from $3.3 billion in 2019. Lower crude oil prices, coupled with the closure of oil development sites at the start of the pandemic due to movement restrictions, weighed heavily on FDI to Nigeria.”, the report stated.