Representational image. Credit: Canva
Foreign direct investment (FDI) flows to Africa faced a marginal decline of 3% in 2023, totaling $53 billion, according to the latest World Investment Report released by UNCTAD on 20 June. This dip was largely influenced by Egypt and South Africa, two of the continent’s largest economies, which experienced varied FDI trends throughout the year.
Despite the overall decrease in FDI, Africa witnessed a notable increase in the share of global greenfield megaprojects, with six projects valued above $5 billion. Leading this surge was Mauritania, where a groundbreaking green hydrogen initiative garnered investments projected to exceed $34 billion—several times the nation’s GDP.
The renewable energy sector also attracted substantial attention, with over $10 billion allocated to wind and solar electricity production projects across Egypt, South Africa, and Zimbabwe. Additionally, Morocco secured a significant deal for a $6.4-billion electric vehicle battery manufacturing facility, highlighting growing interest in Africa’s electric vehicle value chains.
In terms of FDI stock, key investors in Africa include the Kingdom of the Netherlands, France, the United States, the United Kingdom, and China, underscoring diverse international interest in the continent’s economic opportunities.
Regional analyses revealed mixed outcomes: North Africa experienced a 12% decline in FDI, with Egypt and Morocco seeing reduced mergers and acquisitions activity despite strong greenfield project performances. West Africa’s FDI flows dipped slightly by 1%, albeit bolstered by Mauritania’s hydrogen project. Central Africa faced a steeper 17% decline, tempered by a surge in greenfield investments, while East Africa navigated a modest 3% decrease with promising upticks in greenfield and project finance activities. In Southern Africa, South Africa’s FDI inflows dropped by 43%, influenced by fluctuations in Angola.
Looking ahead, despite regional fluctuations, FDI inflows across major African groupings such as ECOWAS and SADC have expanded compared to 2018 levels, reflecting ongoing investor confidence amidst evolving economic landscapes.
This data underscores Africa’s evolving FDI dynamics, marked by a resilience in greenfield investments and strategic shifts in regional economic strategies, poised to drive sustainable development in the years to come.
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Source link : https://solarquarter.com/2024/06/26/mauritanias-34-billion-green-hydrogen-project-highlights-africas-fdi-momentum/
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Publish date : 2024-06-26 10:08:55
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