The United Nations Conference on Trade and Development (UNCTAD) has ranked Nigeria as Africa’s number one destination for Foreign Direct Investment in Africa, for the second time in two years.
The latest UNCTAD report entitled, “Global Value Chains: Investment and Trade for Development”, puts Nigeria’s FDI inflows at $7.03billion while South Africa recorded $4.572bn, Ghana, $3.295bn; Egypt, $2.798bn; and Angola -6.898bn; among others.
According to the report, Foreign Direct Investment flows to African countries went up by five per cent to $50bn in 2012, though global FDI declined by 18 per cent.
The report noted that most of the FDIs into Africa are mainly driven by the extractive industry, but said there was an increase in investments in consumer-oriented manufacturing and services.
It said, “Global foreign direct investment (FDI) fell by 18 per cent to $1.35 trillion in 2012. This sharp decline was in stark contrast to other key economic indicators such as GDP, international trade and employment, which all registered positive growth at the global level. Economic fragility and policy uncertainty in a number of major economies gave rise to caution among investors.
“The road to FDI recovery is thus proving bumpy and may take longer than expected. UNCTAD forecasts FDI in 2013 to remain close to the 2012 level, with an upper range of $1.45 trillion – a level comparable to the pre-crisis average of 2005–2007.” It added, “Developing countries take the lead in 2012 – for the first time ever – developing economies absorbed more FDI than developed countries, accounting for 52 per cent of global FDI flows. This is partly because the biggest fall in FDI inflows occurred in developed countries, which now account for only 42 per cent of global flows.”
In 2011, Nigeria was ranked Africa’s biggest destination for Foreign Direct, with total FDI inflows of $8.92bn. South Africa followed with total FDI inflows of $5.81bn, while Ghana received $3.22bn; Congo ($2.93bn) and Algeria ($2.57bn) respectively.
Experts, who said that the FDI trend had been impressive in the last two years, however, urged government to address other infrastructural and security challenges to fully translate the improved investor confidence into better living standards for Nigerians.
President Goodluck Jonathan, last Tuesday, inaugurated the General Electric’s $1bn service and manufacturing facility in Calabar.
The ground breaking ceremony followed the Memorandum of Understanding signed by the Minister of Industry, Trade and Investment, Mr. Olusegun Aganga; and the Global Chairman/Chief Executive Officer of GE, Mr. Jeff Emmelt, in January.
Procter & Gamble has also commenced a $250m investment in Nigeria. The ground breaking for investment in Agbara Ogun State was held in July 2012.
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