For the second time in two years, Nigeria has retained its position as Africa’s number one destination for Foreign Direct Investment, according to the global FDI report released by the United Nations Conference on Trade and Development on Wednesday.
This, however, is despite the fact that FDI inflows into the country actually fell from $8.9bn in 2011 to $7bn last year.
Specifically, the UNCTAD World Investment Report 2013 subtitled: ‘Global value chains: Investment and trade for development, disclosed that Nigeria recorded FDI inflows of $7.03bn in 2012 to beat other African countries.
FDI into South Africa stood at $4.572bn; Ghana, $3.295bn; Egypt, $2.798bn; and Angola, $-6.898bn, among others.
A breakdown of the report showed that FDI flows to African countries increased by five per cent to $50bn in 2012, even as global FDI fell by 18 per cent.
UNCTAD’s annual survey of investment trends revealed that global FDI fell by 18 per cent to $1.35tn, while it was expected to increase to $1.45tn in 2013, $1.6tn in 2014 and $1.8tn in 2015.
Most of the FDIs into Africa were driven largely by the extractive industry, but there was an increase in investments in consumer-oriented manufacturing and services, the report said.
UNCTAD said “Global foreign direct investment fell by 18 per cent to $1.35tn in 2012. This sharp decline was in stark contrast to other key economic indicators such as GDP, international trade and employment, which all registered positive growth at the global level. Economic fragility and policy uncertainty in a number of major economies gave rise to caution among investors.
“The road to FDI recovery is thus proving bumpy and may take longer than expected. UNCTAD forecasts FDI in 2013 to remain close to the 2012 level, with an upper range of $1.45tn – a level comparable to the pre-crisis average of 2005–2007.”
It added, “Developing countries take the lead in 2012 – for the first time ever – developing economies absorbed more FDI than developed countries, accounting for 52 per cent of global FDI flows.
“This is partly because the biggest fall in FDI inflows occurred in developed countries, which now account for only 42 per cent of global flows.”
Nigeria emerged Africa’s biggest destination for FDI in 2011, with total inflows of $8.92bn. South Africa was ranked next with total FDI inflows of $5.81bn, while other African countries such as Ghana received $3.22bn; Congo, $2.93bn; and Algeria, $2.57bn, respectively.
There has been an increase in investment inflow into the country in the last two years. For instance, President Goodluck Jonathan, last Tuesday, inaugurated the General Electric’s $1bn service and manufacturing facility in Calabar.
The ground breaking ceremony followed the Memorandum of Understanding signed by the Minister of Industry, Trade and Investment, Mr. Olusegun Aganga; and the Global Chairman/Chief Executive Officer of GE, Mr. Jeff Emmelt, in January.
Similarly, Gulf Warehousing Company, Qatar, plans to invest $300m in warehousing and logistic infrastructure in the country, while Procter & Gamble has also commenced an investment worth $250m in Nigeria.