Africa's FDI Decline Offset by Greenfield Megaprojects and Electric Vehicle Investments
Key Ideas
- FDI to Africa decreased by 3% in 2023, totaling $53 billion, with Egypt and South Africa leading the trend.
- International project finance deals in Africa dropped by 50% to $64 billion, but the continent attracted significant greenfield megaprojects, including a $34 billion green hydrogen project in Mauritania.
- Over $10 billion was invested in wind and solar electricity production, with major projects in Egypt, South Africa, and Zimbabwe, while foreign investments in electric vehicles, like a $6.4-billion battery manufacturing facility in Morocco, were also notable.
- Key investing economies in Africa include the Netherlands, France, the United States, the United Kingdom, and China.
According to the latest World Investment Report by UNCTAD, foreign direct investment (FDI) flows to Africa experienced a 3% decline in 2023, amounting to $53 billion. Egypt and South Africa were prominent in driving this trend. Despite a significant drop in international project finance deals by 50% to $64 billion, Africa managed to attract a rising number of global greenfield megaprojects, with six exceeding $5 billion in value. Notably, a green hydrogen project in Mauritania, valued at $34 billion, stood out for its potential to eclipse the nation's GDP several times over. The continent also secured over $10 billion in project finance for wind and solar electricity generation, with notable projects concentrated in Egypt, South Africa, and Zimbabwe. Additionally, investments in electric vehicles were stimulated by the establishment of a $6.4-billion battery manufacturing plant in Morocco. Key economies funneling foreign direct investments into Africa include the Netherlands, France, the United States, the United Kingdom, and China, indicating sustained interest and confidence in the region's economic prospects.