Africa on the rebound from investment drop

2014-07-05 10:03

Africa performed well in 2013, attracting $51.98 billion (R559.2 billion) in inward capital investment, compared with $46.92 billion in 2012.

This is according to the 2014 foreign direct investment (FDI) report, compiled by research unit fDi Intelligence, which monitors global greenfield investment trends.

A greenfield investment takes place when a parent company sets up shop in a foreign country and expands its operational facilities or starts from the ground up.

“This increase of 10.76% is a positive story for Africa, which appears to be rebounding from a drop in inward FDI in 2012 from its $70.92 billion level in 2011,” the report said.

Mozambique was the African country with the largest share of greenfield foreign direct investment into the continent, worth $6 billion. In second place was Nigeria with $5.8 billion, and South Africa was in third place with $5.4 billion.

In 2013, coal, oil and natural gas were the leading sector for FDI in the Middle East and Africa region, attracting $29.14 billion – a 52.01% increase compared with 2012.

The wood, paper and apparel sector witnessed the largest percentage increase, rising from a low $200 million in 2012 to $3.8 billion in 2013.

Investment into telecommunications was growing rapidly, the report noted.

“Interestingly, the [global] capital investment into innovation-focused activities [design, development and testing and also research and development] increased to its highest level on record to $8.93 billion, which is a 261.97% rise on its 2012 level and a 44.22% rise on its 2003 level,” said the report.

FDI should continue to grow in the Middle East and Africa, driven by rapid economic growth on the continent and the recovery of the Middle East from the collapse in construction investment during the global financial crisis, according to the report.

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