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Foreign direct investment (FDI) to African countries hit a record $83 billion in 2021, according to UNCTAD’s World Investment Report 2022 published on 9 June.
FDI to Southern Africa increased almost tenfold to $42 billion
The strong increase was due primarily to a large corporate reconfiguration in South Africa – a share exchange between Naspers and Prosus in the third quarter of 2021.
New project announcements in the country included a $4.6 billion clean energy project finance deal sponsored by UK-based Hive Energy and a $1 billion greenfield project by US-based Vantage Data Centers to build its first African campus.
Investment flows to Mozambique grew by 68% to $5.1 billion. The country saw a jump in greenfield projects, including UK-based Globeleq Generation’s plan to build power plants for $2 billion.
West Africa sees FDI increase by 48% to $14 billion
Nigeria, West Africa’s largest recipient of FDI, saw its flows double to $4.8 billion, mainly because of a resurgence in investments in the oil and gas sectors.
International project finance deals in the country jumped to $7 billion. These included the $2.9 billion Escravos Seaport project to construct an industrial complex.
Projects in extractive industries also helped push FDI to Ghana up to $2.6 billion – an increase of 39% compared with 2020.
Senegal also saw a notable 21% increase in FDI, which reached $2.2 billion. The country registered a 27% rise in announced greenfield projects.
Investment flows to East Africa increased by 35% to $8.2 billion
Ethiopia, a central hub for China’s Belt and Road Initiative, saw FDI flows rise by 79% to $4.3 billion in 2021.
Four out of five international project finance announcements in the country were in renewables.
Other notable increases were reported by Uganda (31% to $1.1 billion) and Tanzania (35% to $922 million), which saw new greenfield project announcements triple in 2021.