FOREIGN INVESTMENT

Despite world turmoil, investment into Africa was ‘stable’ in 2023

By our African Marketing Confederation News Team | 2024

Foreign direct investment into the world’s developing economies dropped overall last year, says UN agency. But Africa stood its ground. 

Foreign direct investment into Africa stayed flat at US$48–billion in 2022 and 2023, meaning the continent fared slightly better than developing economies as a whole, which recorded an overall drop of 9%.

 

Image by SK from Pixabay

This is according to information released last week by UNCTAD, the United Nation’s trade and development agency. 

 

Developing countries in Asia felt the brunt of the decline, registering a 12% drop, while flows to Africa, Latin America and the Caribbean “remained more or less stable”, the agency states. 

 

Overall, foreign direct investment flow into Africa decreased by 1%, although sub-Saharan Africa fared better than North Africa. The latter accounted for only $12-billion of the total inflow of $48-billion, meaning $36-billion went to SSA countries. 

 

“The [African] region saw an increase in greenfield project announcements, particularly in Morocco, Kenya and Nigeria,” UNCTAD reports. 

 

“However, a significant one-third reduction in project finance deals – higher than the global average – raises concerns for the future of infrastructure financing on the continent.” 

 

A ‘greenfield project’ is when a parent company starts a venture in a foreign country by constructing new operational facilities from the ground up. 

 

Developing economies around the world 

 

Looking at developing economies around the world, UNCTAD says the decrease in FDI to these countries and regions last year occurred in a global context of weak investment and economic uncertainty. 

 

India, for example, saw a 47% drop in FDI inflows. However, this was mitigated to some extent by India remaining among the top five global destinations for greenfield projects. 

 

China also reported a rare 6% decrease in FDI inflows. But, similarly, it saw 8% growth in new greenfield project announcements. 

 

“FDI flows to members of the Association of Southeast Asian Nations (ASEAN), normally an engine of FDI growth, declined by 16%,” UNCTAD reports. 

 

“Yet the [ASEAN] group remained attractive for manufacturing investments, with a remarkable 37% increase in greenfield project announcements in nations like Vietnam, Thailand, Indonesia, Malaysia, the Philippines and Cambodia.” 

 

In summary, while many Africans are concerned about how foreign investors view the continent, it fared better than most other developing regions in attracting investment in 2023. A reason for cautious optimism in 2024? 

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    Dr Kin Kariisa

    Group CEO - Next Media

    Dr. Kin Kariisa is an extraordinary force at the helm of Next Media Services, a conglomerate encompassing NBS TV, Nile Post, Sanyuka TV, Next Radio, Salam TV, Next Communication, Next Productions, and an array of other influential enterprises. His dynamic role as Chief Executive Officer exemplifies his unwavering commitment to shaping media, business, and community landscapes.
    With an esteemed academic journey, Dr. Kariisa’s accolades include an Honorary PhD in exemplary community service from the United Graduate College inTexas, an MBA from United States International University in Nairobi, Kenya, a Master’s degree in Computer Engineering from Huazong University in China, and a Bachelor’s degree in Statistics from Makerere University.
    Dr. Kariisa pursued PhD research in Computer Security and Identity Management at Security of Systems Group, Radboud University in Nijmegen, Netherlands. As a dynamic educator, he has shared his expertise as a lecturer of e-Government and Information Security at both Makerere University and Radboud University.

    Dr Kin did his PhD research in Computer Security and Identity Management at Security of Systems Group, Radbond University in Nigmegen, Netherlands. He previously served as a lecturer of e-Government and Information Security at Makerere University in Kampala, Uganda and Radbond University in Netherlands.

    Dr Kin did his postgraduate courses in Strategic Business Management, Strategic Leadership Communication and Strategies for Leading Successful Change Initiatives at Harvard University, Boston USA.

    • Other current and previous roles played by Dr Kin Kariisa:
    • Lecturer of e-Government and Information Security to graduate students at Makerere University, Kampala and Radbond University in the Netherlands
    • Director of Eco Bank Uganda Limited, one of the largest banks in Africa
    • Chairman of the National Association of Broadcasters, an umbrella industry association for all Television, Radio and online broadcasters in Uganda.
    • Chairman of Board of Directors of Nile Hotel International, that owns the leading hotel in Uganda, Kampala Serena Hotel.
    • Chairman of Board of Directors of Soliton Telmec Uganda, the leading telecom company in Optic fibre business managing over 80% of optic fibre in Uganda.