Egypt and Morocco lead in attracting foreign investment in north Africa
Regional, Economics, 11/11/1998
Nigeria attracted one billion in foreign direct investment (FDI) becoming the number one African recepient country of these investments, with Egypt coming in the second place with $834 million.
Morocco attracted $500 Million in foreign direct investments (DFI) in 1997 against $311 million in 1996, says the U.N. Conference on Trade and Development
The UNCTAD report says further that FDI by trans-national corporations (TNCs) into Africa remains however low but affirmed that there are signs of rising levels for the future partly as a result of high FDI rates of return from the continent.
Growth, economic reform and improvements in the regulatory frameworks of many countries in the continent are being increasingly recognized by both domestic and foreign investors.
However, excluding South Africa, FDI flows to Africa were just three percent of the total flows to developing countries in 1997 with a volume of 4.7 billion U.S. Dollars. The figure in 1996 stood at 4.8 Billion U.S. Dollars.
Nigeria, Egypt, Morocco, Tunisia and Angola accounted for two thirds of this total. Inflows of FDI to Africa have to a considerable extent been related to natural resources.
For a number of African countries, many of the economic fundamentals are improving and enabling policy frameworks for investment are being put in place, the report commented.
Meanwhile, the report stressed that 1997 was the fourth consecutive year of economic growth for Africa as a whole and privatization has become increasingly important for attracting FDI, although it is far from being fully explored by most African countries.
In Sub-Saharan Africa, 299 million Dollars from a total of 623 million Dollars in privatization sales were accounted for by foreign investors. Ghana topped the list with 186 million Dollars, selling a 112-million-Dollar stake in Ashanti Goldfields to foreign investors.
Kenya was placed second with 137 million Dollars, which included a 26 percent share in Kenya Airways that was sold to KLM of the Netherlands for 26 million Dollars.
African countries are also strengthening efforts to enhance policy frameworks, making them attractive to foreign investors, the report noted.
By 1997, some 47 out of the total 53 African countries had adopted national laws governing FDI.
The leading countries of TNCs investing in Africa between 1982 and 1996 are Britain, France, the U.S., Germany, Japan and the Netherlands, according to the report.
It said that in recent years, France overtook Britain as the largest single country source of African FDI.
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