Nigeria raked in higher FDI than South Africa in 2020 – UN Report

Africa recorded a total FDI of $38 billion in 2020 representing a drop of 18% from $46 billion recorded in 2019, data from the United Nations Trade Association shows.

According to the report, Nigeria, Africa’s largest economy attracted a total FDI of $2.6 billion in 2020 down from the $3.3 billion it attracted in 2019. South Africa, a major competitor for FDI inflows in Sub Saharan Africa attracted less with $2.5 billion, Nairametrics reports.

Egypt recorded the highest influx of FDI among African countries with a total inflow of $5.5 billion representing a whopping 38% drop. Despite the drop, Egypt remains the top investment destination in Africa.

Egypt remains the top FDI destination in Africa.

According to the UN report, “FDI flows to Africa declined by 18% to an estimated $38 billion, from $46 billion in 2019. Greenfield project announcements, an indication of future FDI trends, fell 63% to $28 billion, from $77 billion in 2019. The pandemic’s negative impact on FDI was amplified by low prices of and low demand for commodities.”

Nigeria has failed to push the needle on FDI investments in the last decade attracting more portfolio inflows compared to direct investment which is viewed as more stable and required to boost economic growth.

FDI-related inflows are mostly targeted at the real sector funding investments in infrastructural development, technological innovation, manufacturing, health care, and Agriculture. According to the United Nations, lower oil prices and the pandemic-induced locked down significantly affected Nigeria’s ability to attract inflows.

Find the report here.