Ethiopia, Kenya and Zimbabwe Saw Strongest Gains in FDI Flow
October 29, 2018 -- Ethiopia saw one of the strongest FDI gains in Africa for year 2017, along with Kenya and Zimbabwe, according to a report from EY.com. By contrast, South Africa, Egypt, Mozambique and Cote d’Ivoire experienced declines in FDI projects in the same year.
South Africa is still the largest African FDI hub, with Morocco; Southern, West, East and North Africa all receive more or less equal FDI (measured in project numbers), according to the report.
The USA remains the single biggest country investing in Africa, while Western Europe (especially UK, France and Germany) is by far the biggest regional investor.
FDI was up across the continent last year, although South Africa experienced a fall in project numbers, on the back of continued weak domestic growth, thereport says.
The 2017 data shows that Africa attracted 718 FDI projects which is up 6% from the previous year. This was in line with a recovery in the continent’s economic growth, following a difficult preceding year.The higher project numbers were driven by interest in manufacturing, infrastructure and power generation. Despite the rise in FDI, project numbers remain below the 10-year average of 784 projects per annum.
The report found that South Africa, Morocco, Kenya, Nigeria and Ethiopia were the dominant anchor economies within their respective regions, collectively accounting for 40% of the continent’s total FDI projects. Overall these four major sub-regions each attract similar FDI when measured by project numbers. For the first time ever, East Africa became the single largest beneficiary of FDI with 197 projects (27% of total projects). Southern Africa, by contrast, fared lowest of the four major regions, at 162 projects (23%).
With a population of 105 million, Ethiopia is the second most populous country in Africa, second only to Nigeria at 190 million.
Long overlooked by world investors, Ethiopia has been growing very rapidly for most of the last couple of decades, registering growths in excess of 10 percent at times.
With a reformist administration of Prime Minister Abiy Ahmed and the unrest of the last few years subsiding, the country seems to poised to do a lot better in coming years.