Foreign direct investment (FDI) inflows to Africa declined by more than 13% in 2000 (figure 1), according to UNCTAD estimates released today. The slump was primarily the reflection of a 50% drop in inflows to the continent´s main recipient countries of FDI - Angola, Morocco and South Africa. Flows to other African countries were more or less stable. FDI into North Africa increased last year, to $2.6 billion, while flows to sub-Saharan Africa were down, from $7.9 billion in 1999 to $6.4 billion in 2000. Within sub-Saharan Africa, the Southern Africa Development Community (SADC(1)) remained the most important subregion in terms of FDI inflows, which nonetheless dropped from $5.3 billion in 1999 to $3.9 billion in 2000.
Africa´s share in world FDI inflows is still very weak, falling below 1% last year. But despite this recent decline, investment flows to the continent are still much higher than in the early 1990s, as African countries have made considerable efforts to enhance their investment climate. FDI is becoming increasingly important for African countries, when standardized against such other economic aggregates as gross fixed capital formation (figure 2).
In view of these trends, redoubling efforts to attract FDI to the continent has become all the more crucial. This issue is the focus of two meetings this month: an UNCTAD round table on promoting Asian investment in Africa (Durban, South Africa, 10-11 July), and the Africa Forum for Investment Promotion, which takes place in Geneva 16 July as part of the Economic and Social Council session.
UNCTAD´s forthcoming World Investment Report 2001, to be launched 18 September, will further analyse these estimates and provide details at country, regional and international levels. The main theme of this year´s report will be FDI and linkages to local enterprises.
