Decline in investment flows to Africa in 2022, -6% for Morocco

Decline in investment flows to Africa in 2022, -6% for Morocco

Foreign direct investment (FDI) flows to Africa fell to $45 billion in 2022, including those to Morocco which fell slightly by 6%, the United Nations Conference on Trade and Development said. development (UNCTAD).

Although these FDI flows to Africa have fallen by around 50% from the record high of $80 billion reached in 2021, they accounted for 3.5% of foreign direct investment worldwide, according to the report on UNCTAD’s World Investment 2023 released this week.

The same source specifies that the number of announcements of new projects has grown by 39% reaching a total of 766. In addition, 6 of the 15 main greenfield investment megaprojects (worth more than 10 billion dollars) unveiled in 2022 are in Africa.

With regard to North Africa, FDI flows to Morocco fell slightly, by 6%, to reach 2.1 billion dollars, unlike Egypt which saw FDI double, amounting to $11 billion from increased cross-border M&A sales. The number of new projects announced more than doubled to 161. The value of international project finance deals increased by two-thirds to $24 billion.

As for West Africa, flows to Senegal remained stable at $2.6 billion, while those to Ghana fell by 39% to reach $1.5 billion. Nigeria also resulted in negative FDI flows of -187 million dollars due to the sale of shares. On the other hand, announced creation projects increased by 24%, reaching 2 billion dollars.

In East Africa, FDI to Uganda and Tanzania increased by 39% and 8% respectively ($1.5 and $1.1 billion), while flows to Ethiopia fell by 14%. % to reach $3.7 billion. However, the country remained the second largest recipient of FDI on the continent.

With regard to Central Africa, FDI in the Democratic Republic of Congo remained stable at $1.8 billion, thanks to flows to offshore oil fields and mining.

In Southern Africa, FDI flows have returned to their usual levels after the abnormal peak in 2021, caused by a major corporate restructuring in South Africa. FDI in South Africa amounted to $9 billion, which is below the 2021 level but twice the average for the past decade. Cross-border mergers and acquisitions in the country reached $4.8 billion, compared to $280 million in 2021. In Zambia, after two years of negative figures, FDI increased to $116 million.

It should be noted that in 2022, there is a significant increase in announcements of new projects in the field of energy and gas supply, with a value of 120 billion dollars compared to 24 billion dollars in 2021. The construction and mining sectors also saw increases in project value, reaching $24 billion and $21 billion, respectively. The information and communication sector saw the highest number of projects, the report says.

The value of international project finance transactions in Africa fell by 47% ($74 billion) compared to 2021, while the number of projects increased by 15% to 157. European investors, in particular the United Kingdom ($60 billion), France ($54 billion) and the Netherlands ($54 billion), hold the largest share of foreign direct investment in Africa.


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