FDI Flow to Africa Falls by 28%

ADDIS ABEBA – Foreign direct investment (FDI) flows to Africa fell by 28% in the first half of 2020 compared to 2019, due to the economic fallout from COVID-19, according United Nations.

In the wake of the pandemic, lockdowns around the world slowed existing investment projects and the prospects of a deep recession led multinational enterprises to reassess new projects, according to the UN Conference on Trade and Development (UNCTAD).

Its latest report said developed economies particularly saw the biggest fall, with FDI reaching an estimated $98 billion in the six-month period – a decline of 75% compared to 2019.

The trend was exacerbated by sharply negative inflows in European economies, mainly in the Netherlands and Switzerland. FDI flows to North America fell by 56% to $68 billion.

– Uncertain outlook –

The 16 % decrease FDI flows to developing countries was “less than expected”, says the report which clams it was “due mainly to resilient investment in China”.

Flows were 28% lower than in 2019 in Africa, says the report. FDI also decreased by just 12% in Asia and 25% lower in Latin America and the Caribbean.

“Developing economies weathered the storm relatively better for the first half of the year,” said James Zhan, UNCTAD’s investment and enterprise director. “The outlook remains highly uncertain.”