Egypt Sees Decline in FDI Inflows Amid Rise in Green Hydrogen Investments
Key Ideas
- Egypt experienced a 13.7% decrease in FDI inflows amounting to $9.8 billion, partially due to high project values in M&As. However, FDI outflows increased by 14% to $390 million in 2023.
- The country's efforts to attract investments were acknowledged with the implementation of a single approval system, the Supreme Council for Investments, and incentives for green hydrogen projects.
- Africa saw a decline of 3% in FDI inflows, with Egypt and South Africa being significant contributors to this reduction. Despite this, Egypt secured agreements worth $10.8 billion for green ammonia and hydrogen projects.
- The UNCTAD report highlighted global trends in FDI patterns, emphasizing the shift towards services, the decline in manufacturing FDI post-COVID-19, and the concentration of investments in high-value sectors like ICT and services, reshaping traditional sectoral distinctions.
The latest UNCTAD World Investment Report revealed a 13.7% decrease in foreign direct investment (FDI) inflows to Egypt, amounting to $9.8 billion, with FDI outflows increasing by 14% to $390 million in 2023. This decline in FDI was attributed to the previous year's abnormally high project values in mergers and acquisitions. The report highlighted Egypt and Morocco as key investment destinations in Africa, crediting the Egyptian government's initiatives to enhance investor appeal through measures like a streamlined approval system and fiscal incentives, particularly focusing on promoting green hydrogen projects. Despite the overall decline in FDI inflows in Africa, the region observed a rise in mega greenfield projects, with Egypt's Suez Canal Economic Zone securing agreements worth $10.8 billion for green ammonia and hydrogen initiatives. Furthermore, the report outlined global trends shaping FDI patterns, including the shift towards services, the negative growth of manufacturing FDI post-COVID-19, and the increasing concentration of investments in high-value sectors like ICT and services. These trends indicate a transformation in sectoral investment patterns and a move towards regionalization and deglobalization in the post-pandemic investment landscape.