Nigeria is West Africa’s largest recipient of Foreign direct investment (FDI) as its flow doubled to $4.8 billion in 2021, mainly because of a resurgence in investments in the oil and gas sectors.
Latest report by the United Nations Conference on Trade and Development (UNCTAD) revealed that the international project finance deals in Nigeria jumped to $7 billion. These included the $2.9 billion Escravos Seaport project to construct an industrial complex.
UNCTAD’s World Investment Report 2022 revealed that the FDI to African countries generally hit a record $83 billion in 2021.
This was more than double the amount reported in 2020 when the COVID-19 pandemic weighed heavily on investment flows to the continent.
Despite the strong growth, investment flows to Africa accounted for only 5.2 per cent of global FDI, up from 4.1 per cent in 2020, according to the UNCTAD.
While most African countries saw a moderate rise in FDI in 2021, the report showed that about 45 per cent of the total was due to an intra-firm financial transaction in South Africa.
Director, UNCTAD’s investment and enterprise division, James Zhan, said: “If we exclude this transaction, the increase in FDI flows to Africa, while still positive, would be more in line with what we observed in other developing regions.”
In terms of subregions, Southern Africa, East Africa and West Africa saw their investment flows rise while those to Central Africa remained flat and North Africa registered a decline.
The largest holders of foreign assets in Africa remained European, led by investors in the United Kingdom ($65 billion) and France ($60 billion).
In West Africa, the FDI increased by 48 per cent to $14 billion. While projects in extractive industries helped push FDI to Ghana up to $2.6 billion – an increase of 39 per cent compared with 2020, Senegal also saw a notable 21 per cent increase in FDI, which reached $2.2 billion.