Top 10 African countries with the largest foreign direct investments

Foreign direct investments (FDI) play a crucial role in the economic development of countries, especially in emerging economies like those in Africa.

FDI inflows bring capital, technology, management knowledge, and opportunities for economic integration into global markets. However, FDI inflows to Africa declined by 3% in 2023 to $53 billion.

The number of international project finance deals fell by a quarter. Greenfield project announcements in developing countries increased by more than 1,000, but these projects were highly concentrated. South-East Asia accounted for almost half, West Asia for a quarter, and Africa registered a small increase, while Latin America and the Caribbean attracted fewer projects.

“Cross-border M&A sales, which accounted for about 15% of FDI inflows to Africa in recent years, remained flat at $8.5 billion.”

In 2023, global foreign direct investment (FDI) saw a 2% decline to $1.3 trillion amidst economic slowdowns and escalating geopolitical tensions, according to the United Nations Conference on Trade and Development’s (UNCTAD) World Investment Report 2024.

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FDI flows to developing countries decreased by 7% to $867 billion, exacerbated by stringent financing conditions that led to a 26% drop in international project finance deals critical for infrastructure investment. This decline has heightened vulnerabilities among the world’s poorest nations to global economic downturns, the report highlighted.

The report further stated that the adoption of the African Continental Free Trade Agreement (AfCFTA) Investment Protocol in 2023 is expected to contribute to growing intra-regional FDI.

Here are the top 10 African countries with the largest foreign direct investments

1. Egypt – US$9.841 Billion

Egypt leads with US$9.841 billion in FDI, thanks to its strategic location, the Suez Canal, and diversified economy. Reforms improving the business climate and incentives for investors have been key.

2. South Africa – US$5.233 Billion

South Africa attracts US$5.233 billion due to its well-developed infrastructure, rich mineral resources, and sophisticated financial markets. The government’s focus on reducing red tape and promoting industrialization has boosted FDI.

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3. Ethiopia – US$3.263 Billion

Ethiopia’s US$3.263 billion FDI is driven by rapid economic growth and large-scale infrastructure investments. Industrial parks and economic liberalization reforms have significantly attracted foreign investors.

4. Uganda – US$2.886 Billion

Uganda’s FDI of US$2.886 billion is fueled by infrastructure investments, particularly in energy and transport, and its natural resource wealth. Regulatory reforms and investment incentives enhance its attractiveness.

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5. Senegal – US$2.641 Billion

Senegal, with US$2.641 billion in FDI, benefits from a stable political environment and strategic location. Investments in energy, mining, and infrastructure, along with proactive government policies, drive FDI inflows.

6. Mozambique – US$2.509 Billion

Mozambique attracts US$2.509 billion, primarily in the natural gas sector. Its vast reserves, strategic Indian Ocean location, and improved business environment contribute to its appeal.

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7. Namibia – US$2.345 Billion

Namibia’s US$2.345 billion FDI is due to its rich natural resources, political stability, and strategic location. Efforts to develop tourism and promote sustainable growth also play a role.

8. Nigeria – US$1.873 Billion

Nigeria receives US$1.873 billion despite challenges, thanks to its large market, natural resources, and growing middle class. Significant investments in oil, gas, telecommunications, and manufacturing are key drivers.

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9. Côte d’Ivoire – US$1.753 Billion

Côte d’Ivoire’s FDI of US$1.753 billion is driven by a stable political environment, diversified economy, and strategic West African location. Infrastructure improvements have further increased investment.

10. Democratic Republic of Congo – US$1.635 Billion

The DRC attracts US$1.635 billion, primarily in mining. Its vast mineral wealth, despite political challenges, offers significant opportunities. Government efforts to improve the regulatory environment are encouraging further investments.