Africa’s F — Foreign Investment

Is Africa receiving its share of foreign direct investment?

February 16, 2005

Is Africa receiving its share of foreign direct investment?

Since Africa produces only 1% of the world's total output — about the same as Belgium — its 2.3% share of world FDI is far more than proportional.

Of course, such investments are not spread evenly throughout Africa. Some countries are very attractive to foreign investors — often those with significant energy resources — while others are not.

In 2003, all of sub-Saharan Africa took in almost $10.1 billion in foreign direct investment. But only four among the 46 countries received more than $1 billion in FDI.

The sub-Saharan country that received the most FDI in 2003 was Equatorial Guinea ($1.43 billion), followed by Angola ($1.41 billion), Sudan ($1.35 billion) and Nigeria ($1.2 billion). Foreign investment is attracted to all four of those countries because of their lucrative oil sectors.

Sub-Saharan Africa’s largest economy — South Africa — only received a relatively paltry $820 million in FDI in 2003.