Foreign Investment in Africa up 5%, Bucking Global Trend

Africa bucked global investment trend with a 5% increase in foreign direct investment inflows to $50 billion, according to a 2013 World Investment Report. This growth was driven partly by foreign direct investment in extractive industries, but investment in consumer-oriented manufacturing and service industries is also expanding.
Foreign direct investment outflows from Africa almost tripled in 2012, to $14 billion. Transnational corporations from the South Africa are increasingly active in Africa, building on a trend in recent years of a higher share of foreign direct investment flows to the region coming from emerging markets. In terms of FDI stock, Malaysia, South Africa, China and India (in that order) are the largest developing-country investors in Africa.
In 2012, Africa was the only region that saw foreign direct investment flows rise. Flows to North Africa reversed their downward trend, and Egypt saw a rebound in investment from European investors.
The investments in the extractive sector were in countries such as the Democratic Republic of the Congo, Mauritania, Mozambique and Uganda. Asian countries remained the largest source of foreign direct investment, accounting for three quarters of the developing-country total. Foreign direct investment outflows from Africa tripled while flows from developing Asia and from Latin America and the Caribbean remained at the 2011 level.
According to the report, BRICS countries are becoming significant investors in Africa. Although Africa receives only 4% of BRICS foreign direct investment outflows, BRICS countries have joined the ranks of top investing countries in Africa. In 2010, the share of BRICS in foreign direct investment inward stock in Africa reached 14 per cent and their share in inflows reached 25 per cent. Their share in the total value of greenfield projects in Africa rose from one fifth in 2003 to almost one quarter in 2012.

Most BRICS FDI World Investment Reportprojects in Africa are in manufacturing and services. Only 26 per cent of the value of projects and 10 per cent of the number of projects are in the primary sector.

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