China's investment cooperation in Africa is described as stable and strong, with mutual benefits and a win-win situation, with Chinese financiers committing $153 billion to African public sector borrowers between 2000 and 2019.

China's investment cooperation in Africa is described as stable and strong, with mutual benefits for both parties, and is expected to bring prosperity to both Africans and Chinese.

China's investment cooperation in Africa is described as stable and strong, with mutual benefits and a win-win situation, indicating a positive and collaborative relationship between the two parties.

"China's investment in Africa has been increasing steadily, with a significant surge in foreign direct investment and trade. This cooperation is described as stable, strong, and mutually beneficial."

China's investment cooperation in Africa is characterized as stable and strong, with mutual benefits, and has played a crucial role in supporting African countries through financial support and infrastructure development.

Africa has significant natural resources, particularly in the agriculture and mining sectors, making it an attractive investment destination.

Agriculture and mining are significant sectors with natural resources in Africa, with potential for growth in private wealth.

"Africa has significant natural resources in sectors such as agriculture and mining, with investments from wealthy individuals in these areas."

The mining industry in Africa is significant, with a shift towards extracting elements for clean energy technologies, and countries rich in copper and nickel are likely to attract foreign investors.

"Africa has significant natural resources, particularly in the mining sector, with countries like Zimbabwe and Zambia having large deposits of platinum, lithium, copper, and other metals."

The total global foreign direct investment in 2021 was 1.65 trillion USD, with nearly three-quarters going to developed countries.

The total global foreign direct investment in 2021 was $1.65 trillion, surpassing pre-pandemic levels.

The fintech sector is the most active for venture capital investment in Africa, with estimated revenues of $30bn by 2025.

The most active sector for venture capital investment in Africa is fintech, as evidenced by a $20m investment in Moove, a fintech company.

The value of Chinese infrastructure projects in Africa over the past two years was 155 billion dollars.

China has invested $155 billion in infrastructure projects in Africa over the past two years.

The UK's investment in Africa is primarily focused on the oil, gas, mining, and financial services sectors, with a total of $65bn in foreign direct investment stock as of 2020.

The UK's investment in Africa is mainly focused on oil, gas, mining, and financial services, with significant deals like the £2.1bn worth of oil and gas agreements made in 2022.

China has pledged to increase agricultural imports from Africa, which could lead to increased cooperation and investment in the agricultural sector.

China has pledged to increase agricultural imports from Africa, with Uganda's President Yoweri Museveni requesting tariff-free and quota-free access for African goods to the Chinese market.

Agriculture is a promising sector for investment in Africa, with African countries seeking to increase their agricultural exports to China.

Agriculture is a promising sector for investment in Africa, as indicated by China's focus on agricultural modernization as one of its major cooperation programs with the continent.

The most promising sector for investment in Africa is agriculture, as it is one of the critical infrastructure areas that the continent needs investment in to industrialise and reduce unemployment.

Agriculture is a promising sector for investment in Africa, as evident from its prioritization under the Africa Investment Forum's Unified Response to COVID-19.

Agriculture is a promising sector for investment in Africa, with potential for value addition in commodities like rubber and oil palm.

South Africa is an important trade partner of China, being one of the largest exporters to China from Africa and a major buyer of Chinese goods.

South Africa is an important trade partner of China in Africa, as evidenced by the mention of South Africa in the context of economic interactions with China.

The value of new projects announced in Egypt in 2021 was $5.6 billion.

India has invested heavily in infrastructure development in Africa, with a focus on reviving the Asia Africa Growth Corridor project.

The growth rate of Foreign Direct Investment into Africa over the past year was 11%.

China's investment cooperation in Africa is described as stable and strong, with mutual benefits and a win-win situation, with Chinese financiers committing $153 billion to African public sector borrowers between 2000 and 2019.

Title:

Content: Global investors waiting to pour in money in Africa to firewall China

By IANS | Published: August 2, 2021 02:09 PM2021-08-02T14:09:05+5:302021-08-02T14:25:34+5:30

New Delhi, Aug 2: After a tepid inflow of foreign direct investments (FDI) into Africa in 2020 amid the ...

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New Delhi, Aug 2: After a tepid inflow of foreign direct investments (FDI) into Africa in 2020 amid the Covid-19, investors are once again warming up to the continent. According to the United Nations Conference on Trade and Development (UNCTAD), FDI flows into Africa declined by 16 per cent in 2020 to $40 billion, from $47 billion in 2019.

China, the primary investor in the continent, has also slowed down its investments into the continent leaving an opportunity for other investors.

While the UNCTAD projected FDI inflow into Africa to grow this year, it said that the slow vaccine roll-out programme is a cause for concern. According to UNCTAD, FDI to the continent is projected to grow by only 5 per cent in 2021. But analysts said Africa as an investment destination has led to "an unprecedented curiosity" among other countries, which are now aggressively looking to mute China's dominance in the continent.

"Africa is critical in the new geopolitical and geo-economic contours. The continent, with its vast natural resources, offers a ready growth platform," an analyst told India Narrative.

According to a study published by Brookings Institution last week, Africa is home to 17 per cent of the world population. However, by 2050, it will have 26 per cent of the global population 2.53 billion people. "If Africa is not successfully integrated into the global economy, there could be a major threat to global prosperity and stability," the study said, adding that by 2050, the continent will be home to an estimated $16.12 trillion of combined consumer and business spending.

The African Continental Free Trade Area (AfCFTA) – the mega trade could give a push to intra-continental investment.

Touted as one of the biggest trade deals in the world, the AfCTA aims to create a single market comprising 1.3 billion people with a combined GDP of about $3.4 trillion.

Meanwhile, the US may have woken up late in recognising the potential of Africa but is making all attempts to make up for the lost time.

The Group of Seven or G7 has already decided to support US President Joe Biden's proposal of carving out a mega infrastructure plan under the "Build Back Better World" (B3W) initiative, expected to bring in transparency and sustainability. Besides, the initiative will be carried out only in consultation with local communities.

The G7 in its meeting in June also announced that it will increase its support to the Indo Pacific and Africa. "We resolve to collaborate with partners around the world, including in the Indo-Pacific and Africa, to actively promote these shared values for the good of all," said the statement.

India too has pressed the pedal on investments in the region. Sources said that the still-born Asia Africa Growth Corridor—the mega infrastructure project that was launched in 2017 to connect Asia and Africa must be revived.

Carnegie Endowment for International Peace noted that Chinese financiers committed $153 billion to African public sector borrowers between 2000 and 2019. "After rapid growth in the 2000s, annual lending commitments to Africa peaked in 2013, the year the BRI was launched. By 2019, though, new Chinese loan commitments amounted to only $7 billion to the continent, down 30 percent from $9.9 billion in 2018," it said.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

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China's investment cooperation in Africa is described as stable and strong, with mutual benefits for both parties, and is expected to bring prosperity to both Africans and Chinese.

Title:

Content: What can Africa expect from FOCAC 2021?

As the 2021 Forum on China-Africa Cooperation (FOCAC) approaches, we examine the state of the China-Africa relationship and what should be on the table at this year's forum.

The eighth edition of the Forum on China-Africa Cooperation (FOCAC) is due to be held in Dakar, Senegal, from 29-30 November 2021, Senegal’s foreign minister, Aïssata Tall Sall, and the Chinese ambassador to Dakar, Xiao Han, have announced.

The theme of the conference will be “Deepen China-Africa Partnership and Promote Sustainable Development to Build a China-Africa Community with a Shared Future in the New Era”, according to Chinese foreign ministry spokesman Wang Wenbin.

Speaking in a press conference in Beijing on 5 November, he said that the meeting would “review and assess the follow-up implementation of the outcomes of the 2018 FOCAC Beijing Summit as well as the joint China-Africa response to Covid-19, and chart the course for China-Africa relations for the next three years and more to come.”

He also predicted that the forum would “inject new impetus into the China-Africa comprehensive strategic and cooperative partnership”.

Four key themes for the FOCAC agenda

On 8 November, Senegal’s foreign minister and the Chinese ambassador to Dakar, Xiao Han, announced that the forum would adopt four resolutions: The Dakar Action Plan (2022-2024); the 2035 Vision for China-Africa Cooperation; the Sino-African Declaration on Climate Change; and the Declaration of the Eighth Ministerial Conference of FOCAC.

These, predicted Eric Olander, writing on the China-Africa Project website, are likely to “serve as the main pillars” of the forum.

The Senegalese foreign minister said that the forum would appraise the results of China-African cooperation during the Covid-19 pandemic and define how it would continue for the next three years and beyond.

She also announced that the seventh China-Africa Business Conference would take place in parallel with FOCAC at the Diamniadio Exhibition Centre in Dakar and by video conference. The 2018 edition in Beijing hosted more than 1,000 African representatives from over 600 enterprises, business groups, and research institutions.

“FOCAC is our common good. Its success will bring prosperity to current and future generations of Africans and Chinese,” said Aïssata Tall Sall.

In an interview with the Xinhua news agency the minister said she expected the forum to address Africa’s place within the Belt and Road Initiative, underlining its importance to world trade.

Hundreds of ambassadors and diplomats are expected to attend the forum, which is likely to be a mixture of online and live events.

However, as Lina Benabdallah, assistant professor at Wake Forest University, has pointed out on Twitter, the event will be at ministerial level, which means that heads of state such as Chinese President Xi Jinping will not be attending.

“This is no doubt a disappointment to #MackySall who expressed big enthusiasm for hosting (in addition to co-chairing) the #FOCAC meeting. At this point his Minister of foreign affairs is in charge of hosting. #FOCAC at the summit level just brings higher visibility, more perks,” she writes.

We examine further below what is likely to be on the agenda at this year’s forum.

What is FOCAC?

FOCAC is a triennial high-level forum between China and all of the states of Africa, with the exception of Eswatini, which continues to recognise Taiwan.

Modelled on Japan’s Tokyo International Conference on African Development (TICAD), it provides an organising mechanism for Chinese foreign policy toward Africa.

Typically attended by the incumbent Chinese president and many of his counterparts across the continent, FOCAC has frequently played host to eye-catching Chinese policy announcements and financial commitments. The forum is alternately hosted in Beijing and major African capitals.

The China-Africa Business Council’s recent report on China’s private sector investment in Africa looks forward to the event as “another milestone and a new starting point for China-Africa economic and trade cooperation” that will provide “a great opportunity for all African countries to attract foreign investment and expand their international influence”.

“Both Chinese and African enterprises should anticipate the opportunity to enjoy great mutual policy benefits,” says the report.

The forum looks to build on the increasingly close economic relations that have been forged between China and Africa over the last 20 years.

According to the China-Africa Research Institute at Johns Hopkins University, the value of China-Africa trade in 2019 was $192bn, up from $185bn in 2018. In 2019, the largest exporter to China from Africa was Angola, followed by South Africa and the Republic of Congo. In 2019, Nigeria was the largest buyer of Chinese goods, followed by South Africa and Egypt.

China is also Africa’s biggest source of foreign direct investment – investment surged from $75m in 2003 to $2.7bn in 2019. Chinese FDI flows to Africa have exceeded those from the US since 2014. Between 2013 and 2018, 45% of China’s foreign aid went to Africa. The number of Chinese workers in Africa by the end of 2019 was 182,745, according to official Chinese sources.

How has FOCAC impacted the financial relationship between China and Africa?

The first official FOCAC was held in Beijing in 2006, following two major ministerial conferences in Beijing and Addis Ababa in 2000 and 2003. Between 2000 and 2019, the China-Africa Research Institute at Johns Hopkins University estimated Chinese financiers signed 1,141 loan commitments worth $153bn with African governments and their state-owned enterprises.

In 2015, China unveiled its largest commitment of the conference series, a $60bn package of aid, subsidised lending, and state-backed investment, a commitment repeated in 2018.

Chinese financial support has proved crucial to African countries over the last two decades. Loans from government and state-owned banks have enabled the construction of major infrastructure projects across the continent, including highways, ports, airports and government buildings.

But much of that support has been relatively opaque. According to a research paper released in late September by the China Africa Research Institute, Zambia’s outstanding external debt to Chinese financiers is approximately $6.6bn, almost double the $3.4bn revealed by the previous Zambian government. The estimates do not include substantial arrears to Chinese contractors for unpaid projects, part of an estimated domestic arrears pile amounting to $2bn.

What was promised at FOCAC in 2018?

For the first time in the history of the FOCAC meetings, China’s commitments to Africa stayed flat in 2018, with $60bn pledged over three years. Prior forums had seen an exponential growth in commitments, starting from around $5bn in 2006.

According to Annalisa Prizzon, a senior research fellow at the UK-based ODI, the 2018 commitment was more weighted towards aid than previous instalments, with 25% of these commitments – or $5bn a year – in the form of grants, interest-free loans and concessional loans.

In a May speech, Chinese finance minister Wang Yi said that over 85% of the eight major initiatives announced at the 2018 Beijing Summit have been implemented, 70% of the $60bn supporting funds have been disbursed or earmarked, and a large number of cooperation projects have been launched or completed.

Other analysts are less enamoured of the track record of FOCAC in delivering benefits to Africa. Writing for African Business, former Liberian public works minister Gyude Moore says that a vast economic chasm has opened between Africa and China. He argues that this year’s forum presents an opportunity for African states to recalibrate and correct their courses using lessons from China’s past.

Also writing for African Business earlier this year, Hannah Ryder, CEO of Development Reimagined, an African-led international development agency based in Beijing, called for “a more organised, collective approach to engagement” on the part of African leaders at this year’s FOCAC, and summarised her organisation’s blueprint for an African China strategy.

For Ryder, writing in the November issue of African Business, the factors that drove China to commit $60bn to African countries in 2018 remain as strong as ever, but the outcomes of this year’s forum remain uncertain.

Future trajectories of China-Africa relations

The report FOCAC at 21: Future Trajectories of China-Africa Relations published in October by the China Foresight project at the London School of Economics brings together a number of international experts to examine emerging trends likely to shape China-Africa relations in coming years.

  • Stephen Paduano, executive director of the LSE Economic Diplomacy Commission, says that the crux of China’s foreign economic policy since the death of Mao has been running trade surpluses. It is far from certain that China can pull back from its overseas spending spree, as a decline in overseas capital flows would create a decline in China’s trade surplus that could be politically unpalatable.
  • Mzukisi Qobo, head of Wits School of Governance at the University of the Witwatersrand in South Africa, argues that African leaders must use their agency more effectively at FOCAC to seek more market access in China, while also using the African Continental Free Trade Agreement as a basis for industrial development and engagement with external actors.
  • Lina Benabdallah, assistant professor at Wake Forest University, points out that in the early stages of the Covid-19 pandemic, when China was in need of assistance, African states provided much of that aid. China’s reciprocation of that assistance, she says, has filled the void left by the absence of other partners but has yet to reach its full potential. FOCAC 2021 will provide the opportunity to negotiate better delivery deadlines for Chinese vaccines and the possibility of producing more of them locally.

The report also contains articles by experts examining China’s security engagement with Africa, its digital infrastructure in Africa, educational exchanges and collaboration on space technology.

What will be on the agenda at this year’s FOCAC?

Analysts have predicted that an era of “easy” Chinese credit in Africa is drawing to a close , as an economic relationship primarily based on the resource trade has shifted towards infrastructure and a political and strategic relationship.

The Covid-19 pandemic has had a catastrophic financial impact on many African countries, leading to fears of debt defaults on the billions of dollars that China has lent the continent over two decades. The World Bank estimates that Africa’s funding gap stood at $290bn in 2020.

Without debt support, unaffordable payments on the vast portfolio of loans from China and other wealthy nations could lead to a series of chaotic defaults by individual African countries.

For its part, China says it is a participant in the G20 Debt Service Suspension Initiative, and says it has signed debt suspension agreements or similar understandings with 19 African countries.

It has also cancelled interest-free loans due to mature by the end of 2020 for 15 African countries. Yet African countries concerned by their fiscal situation are likely to push for much more generous debt renegotiation and forgiveness.

According to Wang Yi, the conference will also focus on joint efforts against Covid-19, including the provision of more vaccines for the continent. Africa’s share of China’s total global vaccine distribution remains at 8% compared to 61% for Asia, according to a Chinese vaccine tracker report from @BridgeBeijing.

There will also be talks on deepening cooperation on China’s Belt and Road global infrastructure plan and adopting sector-specific cooperation measures for priority areas such as healthcare, investment, trade, industrialisation, agricultural security, climate change, peace and security, human resources and digital economy.

According to the South China Morning Post, African countries will be “pushing to grow their agricultural exports into China” at the forum.

The newspaper quotes an interview by Bloomberg with Uganda’s President Yoweri Museveni in which he says that China should “provide tariff-free, quota-free access” for African goods, such as that allowed by the US African Growth and Opportunity Act (AGOA) or a deal mirroring Europe’s Everything But Arms arrangement for least developed countries.

“The only new thing we shall insist on is market access to the Chinese market, because that will help Africa a great deal,” Museveni told Bloomberg on 1 November. “The next thing I would ask from them is to allow our products to enter their market quota-free, tax-free.”

Mauritius is the only African country to have signed a free trade agreement with China.

A very different FOCAC in 2021?

Discussing the forthcoming forum on the China in Africa podcast, Eric Olander and Cobus van Staden predict that the 2021 edition will be “a very different FOCAC than in recent years”.

They foresee the announcement of smaller infrastructure projects than at previous editions, but believe digital and tech will be big – “expect lots of smart cities projects to be announced,” says van Staden.

Agriculture is a theme that they expect to be much higher on the agenda this year, as it will give China a chance to “stick it to the West”.

On the question of whether China will bring a big chequebook to the table, they say that as no other countries have announced the size of their commitments in recent bilateral meetings with Africa, this will be a chance for China to make an impression.

However, the area in which they most expect China to announce a big number is in the amount of vaccines it will be sending to Africa.

As regards green investment, they ponder whether there will be any gesture to replace the investments in coal on the continent that Beijing has recently cut. Given China’s lead in renewable technology, they see the space for a “real movement forward” in this area.

Additional research and reporting by Charles Dietz.

China's investment cooperation in Africa is described as stable and strong, with mutual benefits and a win-win situation, indicating a positive and collaborative relationship between the two parties.

"China's investment in Africa has been increasing steadily, with a significant surge in foreign direct investment and trade. This cooperation is described as stable, strong, and mutually beneficial."

How has China's FDI in Africa changed from 2003 to 2019?

Who is Africa's largest trading partner and what was the trade value in 2023?

China's investment cooperation in Africa is characterized as stable and strong, with mutual benefits, and has played a crucial role in supporting African countries through financial support and infrastructure development.

Africa has significant natural resources, particularly in the agriculture and mining sectors, making it an attractive investment destination.

Which sectors received the most foreign investment?

Agriculture and mining are significant sectors with natural resources in Africa, with potential for growth in private wealth.

Title:

Content: Archive / Global News
World Today – Two small countries driving strong growth in Africa ’ s private wealth
You are now following the news of two small countries driving strong growth in Africa's private wealth from the World News section and now we leave you with the full details
MOHAMMED, Abu Dhabi, March 4, 2023 09: 22 PM – Rwanda and Mauritius combined account for less than 5 percent of Nigeria ’ s GDP, but the two small countries are driving strong growth in private wealth in Africa which is expected to rise to $3 trillion by 2031 from the current 2.1 trillion.
According to Henley Global Consulting ’ s Africa Private Wealth Report, Africa ’ s smaller and better-regulated economies are fast becoming centres of wealth and home to more millionaires on the continent.
Private wealth in Mauritius is expected to grow by 80 percent over the next 10 years, compared with 60 percent for Rwanda.
Great for Mauritius.
The number of high net worth individuals in Mauritius will reach more than 8,000 by 2031, making it one of the fastest attracting markets for high net worth individuals in the world, along with Australia, New Zealand, Switzerland and Malta.
In 2022, Mauritius became the first African country in terms of per capita wealth, due to the significant growth in the number of wealthy people who have flocked to it in recent years, taking advantage of the easy environment to do business, with Mauritius ranked 13th globally in the latest World Bank report on the indicators of the business environment; and ranked by the New World Index as the safest country in Africa.
Adult Retreat
As small countries attract more wealth, countries that have historically been the epicenter of private wealth in Africa are experiencing a steady exodus of millionaires.
Over the past 10 years, about 4,500 people with more than $1 million have left South Africa.
Although South Africa remains a major bastion of wealth in Africa, with a strong market for luxury real estate and wealth management services, it has faced significant economic and security challenges in recent years.
Of the 2,668 billionaires in the world, 15 are born in South Africa, but only 5 still live there.
Nigeria, Africa ’ s largest economy, has seen a sharp decline in total wealth, having suffered in recent years from high unemployment, corruption and over-reliance on oil exports.
Positive outlook
The outlook for private wealth on the continent is largely positive, as African countries have become less reliant on extractive industries, and business conditions continue to improve in many countries.
On the other hand, rapid population growth is a magnet for financiers looking for larger consumer markets.
Khaya Munzima, editor-in-chief specializing in economic affairs at the South African Broadcasting Corporation, believes that the continent has a lot of potential that helps to grow private wealth, especially in the central sectors that include agriculture, mining, information and communications technology, real estate and others.
“Africa is the second largest continent in the world with a population of 1.2 billion people, which is important for consumer activities that attract private wealth. ”
“The global economy is so interconnected that it is undeniable that the impact of the Russian conflict in Ukraine has been enormous on Africa, and there is an urgent need to pay more attention to the development of the financial sector, which is a key pillar of private capital. ”
Challenging the business environment
For experts, the African countries best able to improve the business environment will be the most profitable for the most part.
The World Bank estimates that of the 35 least business-friendly countries in the world, 27 are in Africa.
In this context, experts point to several challenges that hinder financial flows to many African countries, including corruption, bribery and extortion, as well as security and political instability.
Investment consultant Khea Sithol says some African countries are treating foreign firms as tools to absorb the crises they face.
“They stalk and blackmail foreign companies when they feel they need more money, hard currency, or more taxes to run parts of the country. ”
The economic system in many African countries poses a real challenge to the wealthy, as the legal framework governing investment relations is linked to the survival or demise of power in a highly volatile political environment.
Important indicators
136,000 people in Africa have assets of more than $1 million, of whom about 7,000 have assets of more than $10 million and 305 have assets of more than $100 million.
21 individuals in Africa have net assets of more than $1 billion, most of whose investments are in real estate, mining, telecommunications, luxury goods trading and agriculture.
39,000 South Africans own $651 billion in South Africa, of which $370 billion is concentrated in Johannesburg and Cape Town, the two richest cities in Africa.
• 27% decline in private wealth in Nigeria over the past 10 years, and 10,000 private Nigerians currently own about $228 billion.
We hope to be able to convey the full details of two small countries that are driving strong growth in Africa ’ s private wealth.
In God ’ s care and protection.
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"Africa has significant natural resources in sectors such as agriculture and mining, with investments from wealthy individuals in these areas."

Which sectors received the most foreign investment?

The mining industry in Africa is significant, with a shift towards extracting elements for clean energy technologies, and countries rich in copper and nickel are likely to attract foreign investors.

Title:

Content: The “green ” energy transition announced by the European Union in the name of combating global climate change requires a huge amount of cheap resources to deploy a network of renewable energy sources (RES).
Therefore, environmentally concerned politicians not only of the EU, but also of the United States, once again turned their eyes to Africa, where China is already in full control.
Bidding for Africa
Ivan Shilov © IA REGNUM
These countries are placing a big bet on Africa, hoping to meet the growing demand for renewable energy and at the same time promising the continent fantastic economic growth.
It is possible to buy green electricity from African countries: according to current estimates, solar power generation is 10 TW, hydropower - 350 GW; wind power - 110 GW.
Mozambique is considered one of the greenest countries in the world - it receives 81% of its electricity from hydropower.
However, much of Africa's energy resources remain largely untapped.
This is where foreign investors put their feet.
With the help of international consulting and investment agencies, they estimate that Ethiopia has solar and hydropower capacity of more than 60,000 MW, while in South Africa, the potential for wind power is estimated at 67,000 GW.
Having adopted the rules of the game of potential investors and decided that renewable energy is the source of their enrichment, some African countries have set themselves goals in the field of green energy development.
By 2030, Ghana aims to increase the share of its national “green ” energy balance from 42.5 MW to 1,363 MW, Angola is ready to use RES by 70% by 2025, and Senegal is doing everything possible to increase the share of RES in the country ’ s energy balance to 30% by 2030.
Windmills
Myriams-Fotos
The Paris climate agreement has forced many African governments to take the climate agenda more seriously, leading to the inclusion of RES provisions in national legislatures, including reforms aimed at encouraging foreign direct investment and private business participation in the process.
Paradoxically, for all the attractiveness of the African continent for “green ” investors, African countries are experiencing an energy crisis: currently more than 600 million people do not have access to electricity, and more than 900 million people do not have access to clean fuels for cooking.
Energy demand is growing every year across the continent due to population growth, with developing countries expected to account for more than 90% of the world ’ s population growth by 2050.
Electrifying their own territories has become a priority for many African governments, which requires significant investment, and here the whole calculation is on foreign investors.
It should not be forgotten that Africa is the second largest mining industry in the world, with many countries of the continent dependent on exploration and mining.
Already, the “green ” energy transition is orienting this industry towards the extraction of elements necessary for the production of electric vehicles, batteries and other clean energy technologies.
Although nearly 50% of South Africa ’ s export value comes from the development and trade of fossil fuels, the main focus is shifted to nickel, copper and cobalt mining – these minerals serve as important components in renewable energy technologies, and demand for them is expected to grow exponentially in the coming decades.
Countries rich in copper and nickel, such as the Democratic Republic of the Congo, Zimbabwe and Zambia, are likely to be especially loved by foreign investors.
To understand what promises these investors entry to the continent, it is enough to study the latest data on the size of mineral deposits, so necessary for the production of renewable energy.
Zimbabwe boasts the world ’ s second largest platinum deposit (2.8 billion tons) and rich chrome ore deposits (10 billion tons), as well as Africa ’ s largest lithium deposit.
The mining sector of the country is estimated at $12 billion a year.
With the growing demand for batteries, Zimbabwe is poised to become one of the world ’ s largest exporters of lithium, and is currently developing four major industrial projects.
Lithium
Dnn87
Another contender for an investment boom is Zambia, which has about 6% of the world ’ s proven copper reserves, as well as some of the richest deposits in the world, making the country the seventh largest copper producer in the world.
In addition, Zambia has prospects for uranium, gold, coal and diamonds.
The resources of the Democratic Republic of the Congo are estimated at tens of trillions of dollars - these are unused reserves of gold, cobalt, diamonds and high-quality copper.
In 2019, this South African country produced a total of 100,000 metric tons of cobalt, accounting for 70% of global production.
The country boasts some of the highest quality copper deposits in the world.
According to an E & Y report titled “Africa ’ s Attraction Program, ” Africa ’ s young, vibrant population and significant economic potential make it a tidbit for foreign investors.
However, the extraction of minerals and the construction of power plants does not mean that the lives of the African
Rather, it means more exploitation of cheap labor and enrichment of decision makers on how to dispose of the natural resources of their States.
Read earlier in this story: Africa is waiting for the irreversible consequences of the European green course
Read the development of the plot: Copper mining companies in Zambia plan to attract to gold mining

"Africa has significant natural resources, particularly in the mining sector, with countries like Zimbabwe and Zambia having large deposits of platinum, lithium, copper, and other metals."

The total global foreign direct investment in 2021 was 1.65 trillion USD, with nearly three-quarters going to developed countries.

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Global FDI reached US $1.65 trillion last year, surpassing pre-pandemic levels
According to the latest report of the United Nations, global foreign direct investment (FDI) surged 77% last year from the previous year, rebounding strongly from the impact of the COVID-19 epidemic and surpassing the pre-epidemic level, but the distribution of overseas funds is uneven, mainly concentrated in the developed countries of Europe and the United States, followed by the developing countries, and the poorest countries.
The United Nations Conference on Trade and Development (UNCTAD) released data on the 19th, the total overseas investment of global enterprises in 2021 reached 1.65 trillion US dollars, up from 929 billion US dollars in 2020, of which nearly three-quarters went to developed countries.
According to the report, FDI from rich countries reached an estimated $777.7 billion last year, three times the previous year.
FDI in the United States jumped 114% from the previous year, and in Europe by more than 80%, thanks to the surge in cross-border M & A transactions (M & A).
FDI inflows to developing countries increased by 30 per cent last year to close to $870 billion, including accelerated growth in East and Southeast Asia, a return to near pre-pandemic levels in Latin America and the Caribbean, and an increase in West Asia.
As for the poorest countries, more foreign capital flowed into Africa last year than in the previous year.
FDI by most African firms has increased.
In terms of industry, driven by favorable long-term financing conditions, economic stimulus packages and overseas investment plans, the infrastructure sector was a big winner last year, with financing increasing by 53% in several years and 91% in value, mostly in high-income regions and in Asia, Latin America and the Caribbean.
In contrast, new investment in industry and global value chains was weak last year.
The number of greenfield investments announced last year was almost flat (down 1% year-on-year), but the amount increased slightly by 7%.
New investment plans in global value chain-intensive industries, such as electronics, fell further.
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The total global foreign direct investment in 2021 was $1.65 trillion, surpassing pre-pandemic levels.

The fintech sector is the most active for venture capital investment in Africa, with estimated revenues of $30bn by 2025.

Title:

Content: When asked for his views on diversification as a strategy for portfolio management, Warren Buffett responded, “diversification is protection against ignorance”. Instead of a diversified portfolio, the Oracle of Omaha famously prefers a concentrated one, composed of a few sectors he has rigorously studied.

The UK’s investment strategy for the African continent is seemingly straight out of the Buffett playbook. As of 2020, the UK holds $65bn in total foreign direct investment (FDI) stock in Africa, second only to China. The vast majority of the portfolio is in oil, gas, mining and financial services.

In 2022 five new oil and gas deals worth £2.1bn were struck at the UK-Africa summit. In stark contrast, just £161m (8% of the total summit commitments) were invested in clean energy. One may agree with the UK’s strategy, suggesting that there aren’t many other high-yield investments to be made other than in oil majors, legacy miners and grey-haired banks. And besides, who would disagree with Buffett’s dictum? He is the sixth-wealthiest person in the world after all.

The truth of the matter is that Buffett would not be as wealthy as he is without adapting to changes in market trends, technologies and geopolitics. In May he sold his remaining stake in chip manufacturer TSMC due to geopolitical considerations (TSMC is based in Taiwan). A concentrated portfolio does not mean a stagnant one. It is this insight that the UK is overlooking, setting itself up to miss opportunities in those new industries rapidly taking shape across the world’s youngest and most promising continent.

Two trends are shaping markets across the continent. One of these is the adoption of financial technologies and the other is increased demand for healthcare, a consequence of Africa’s population boom and rising standards of living.

Fintech sector

McKinsey, a consultancy, estimated that revenues in the African fintech sector could surge eight times their current value to $30bn by 2025. Between 2020 and 2021 alone, the number of tech start-ups tripled to 5,200 companies. In 2021, seven of the 10 newly minted African unicorns (private companies valued over $1bn) are fintechs. As more Africans get connected and as digital identification verification models mature, fintechs will scale and profits will follow.

The second sector is pharmaceuticals. As Africa’s population grows and incomes rise, more money will be spent on healthcare. Within this sector, the Covid-19 pandemic laid bare the worrisome state of Africa’s vaccine and therapeutic manufacturing capabilities. Estimates vary, but some assessments forecast vaccine demand to double in volume from about 1-billion doses now to more than 2.7-billion doses by 2040. Industries adjacent to pharmaceuticals such as logistics, packaging and protective equipment are likely to cash in on increased private and public healthcare expenditure.

There are some positive signs that the newly revamped British International Investment (BII), formally the Commonwealth Development Corporation, is adjusting its investments because of these market trends. In 2020, the BII made a $150m investment in Kelix bio, a pan-African pharmaceutical platform focusing on manufacturing and marketing. It also executed a $20m, four-year structured credit deal with Moove, a fintech company that provides customers with cheaper access to vehicles.

Risk premium

These steps are positive but they are small. Inward FDI for Africa remains pitiful. Last year set a record for the continent, bringing in $83bn. To put this in context, the City of London in 2020 hit $831bn in FDI (10 times that of a continent of 54 countries), according to the Office of National Statistics.

What to make of this all? At least two insights. First, the UK should look to new sectors, taking bold bets in companies leading the fintech and pharmaceutical sectors. The second insight is that Africa’s risk premium is overpriced. There is opportunity beyond the industries of the 20th century; one just needs to look for them.

• Nott works for a venture facility for public benefit and is based in London. He writes in his personal capacity. You can follow his writing on Twitter @TheAfricaBrief.

Picture: 123RF

What trends are emerging for African startups in 2022?

The most active sector for venture capital investment in Africa is fintech, as evidenced by a $20m investment in Moove, a fintech company.

What trends are emerging for African startups in 2022?

The value of Chinese infrastructure projects in Africa over the past two years was 155 billion dollars.

Title:

Content: Wednesday 23 August 2023
Chairman of the Board of Directors and Editors
Abdurrahim Ali
Editor-in-Chief
Dalia Abdul Rahim
Chairman of the Board of Directors and Editorial Board
Abdurrahim Ali
Editor-in-Chief
Dalia Abdul Rahim
The world.
China accounts for 31% of Africa ’ s infrastructure projects
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According to a report by the Heinrich Foundation, a Singapore-based charity that promotes sustainable global trade, China ’ s rise in infrastructure construction in Africa has accelerated since the launch of the Belt and Road Initiative in the fall of 2013.
Chinese companies accounted for 31 per cent of Africa ’ s infrastructure contracts last year, worth more than $50 million, compared with just 12 per cent of Western competitors, the report said.
The report pointed out that China ’ s strong rise in infrastructure projects in Africa has increased since the launch of the Belt and Road Initiative, and in 1990, Western companies accounted for 85% of infrastructure contracts in Africa.
In 2013, Chinese companies accounted for only 12% of these contracts, compared to 37% for Western companies.
The report also revealed that the value of infrastructure projects implemented by China in Africa over the past two years amounted to 155 billion dollars, compared to only 44.8 billion dollars for foreign direct investment by the United States in the continent in 2021.
According to a recent study by consulting firm McKinsey, more than 10,000 Chinese companies are now operating in Africa, and the combined revenues of these companies, which have invested $300 billion in the continent, are expected to reach $440 billion in 2025.

China has invested $155 billion in infrastructure projects in Africa over the past two years.

The UK's investment in Africa is primarily focused on the oil, gas, mining, and financial services sectors, with a total of $65bn in foreign direct investment stock as of 2020.

Which European countries lead investment in Africa?

Which countries are actively investing in Africa besides China?

The UK's investment in Africa is mainly focused on oil, gas, mining, and financial services, with significant deals like the £2.1bn worth of oil and gas agreements made in 2022.

Which European countries lead investment in Africa?

Which countries are actively investing in Africa besides China?

China has pledged to increase agricultural imports from Africa, which could lead to increased cooperation and investment in the agricultural sector.

What are the outcomes of increased agricultural investments in Africa?

China has pledged to increase agricultural imports from Africa, with Uganda's President Yoweri Museveni requesting tariff-free and quota-free access for African goods to the Chinese market.

What are the outcomes of increased agricultural investments in Africa?

Agriculture is a promising sector for investment in Africa, with African countries seeking to increase their agricultural exports to China.

What are the outcomes of increased agricultural investments in Africa?

Which sectors received the most foreign investment?

Agriculture is a promising sector for investment in Africa, as indicated by China's focus on agricultural modernization as one of its major cooperation programs with the continent.

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Content: Connect with us

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Chinese Foreign Minister Wang Yi.

Fifth Estate

Chinese FM Wang Yi’s visit cements Sino-Africa relations

-Wang Yi will be in Kenya, Eritrea and Comoros from Jan 4-7.
-It’s an annual tradition for Chinese FM to visit Africa at the start of the year.
-The visit cements China-Africa relations.

Following in the tradition of Chinese foreign ministers starting every new year with a visit to Africa, State Councilor and Foreign Minister Wang Yi will visit Eritrea, Kenya and the Comoros from January 4 to 7, 2022 upon invitation by the respective hosts. This will be the 32nd annual visit to the continent.

Making the announcement on December 2, 2021 Zhao Lijian, spokesperson for the Chinese Foreign Ministry noted that this customary visit demonstrates the great importance China attaches to its traditional friendship with Africa and the development of China-Africa relations.

For Sino-Africa experts and watchers alike, this is one of the most important annual highlights and sets the tone of how the partners will react to geopolitical issues going forward. It is also a barometer of how the two have reacted to external pressure bent on putting a spanner in their socio-economic and even political works.

That China and Africa have formed a close bond in a long running relationship spanning more than five decades is not in doubt. Currently, China has established diplomatic relations with 53 African countries, in addition to 160 pairings with sister provinces or cities between the two partners. This shows the depth of cooperation and closeness that has progressively developed over time.

China has established 61 Confucius Institutes and 48 Confucius Classrooms in Africa. Language is a crucial channel in creating mutual understanding, which informs the establishment of these basic language and cultural centers. It is also added value for Africans who, with the addition of Mandarin to their lingua franca and foreign second languages, are becoming truly global citizens through multilingualism. But it is expected that with Sino-Africa relations becoming widespread in Africa, Mandarin will replace most foreign languages in the continent in a span of less than 50 years.

China’s COVID-19 assistance to Africa is well documented. Recently, President Xi Jinping announced that China will provide another one billion doses of COVID vaccines to Africa, including 600 million doses as a donation, to help the countries achieve the goal set by the African Union of vaccinating 60 percent of the African population by 2022. Africa will also benefit immensely from China’s COVID-19 assistance to developing countries bilaterally, and even through multilateral channels like the COVAX Facility.

During the eighth ministerial conference of the Forum for China-Africa Cooperation (FOCAC) held in Dakar, Senegal in November, 2021 China pledged to permit $300 billion worth ofAfrican imports in the next three years. It also promised $10 billion in trade finance to support African exports. Chinese businesses will also invest at least $10 billion in Africa over the next three years, and offer $10 billion worth of credit facilities to African financial institutions.

In a great gesture of genuine friendship, China said it is ready to channel $10 billion to African countries from China’s share of the International Monetary Fund’s new allocation of special drawing rights. To cap it all on this front, Chinese companies in Africa plan to create not less than 800,000 local jobs.

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The year 2021 marked the 65th anniversary of the start of diplomatic relations between China and African countries. Almost by design, Agenda 2063’s flagship projects reflect FOCAC’s pillars. These are wide ranging sectors in the areas of infrastructure, science and technology, education as well as arts and culture. Specifically, Sino-Africa cooperation has experienced either the conception, emergence or realization of some major initiatives, some of these together with other African partners.

These include the ten major cooperation programs envisioned by President Xi during the FOCAC Johannesburg Summit in December 2015 – agricultural modernization, infrastructure, finance, green development, trade and investment facilitation, poverty reduction, public health, cultural and people-to-people exchanges, and peace and security.

Over the past two decades, Chinese overseas Foreign Direct Investment to Africa has grown, from $75 million in 2003 to $ 5.4 billion in 2018. Through the Belt and Road Initiative (BRI), China has

also expanded its sphere of influence in Africa, and specifically through investment in infrastructure development such as industrial parks, railway, ports, and roads among others.

During the launch of a report in Nairobi titled “Shared Prosperity: Tracking the Belt and Road Initiative in Kenya, 2018-2021” held in November, President and Chief Executive of the Africa Policy Institute, Prof Peter Kagwanja, observed that the centuries-old reservoir of collective wisdom and philosophy carries the values of cooperation and solidarity between China and Africa as two old civilizations with a long history of friendly interactions and mutual cooperation.

Today, FOCAC and BRI form the twin-engines of the SinoAfrica architecture now propelling Africa’s development. China has committed at least $200 billion to lift Africa from poverty and underdevelopment. After BRI was launched, China has extended a $120 billion dollar lifeline, $60 billion in 2015 and another $60 billion in 2018. This is the largest bailout in human history, and the first ever by a developing nation like China,” observed Prof Kagwanja.

As noted during FOCAC, China has become an indispensable partner in Africa’s development, and the forum has now become the most important accelerator for Sino-Africa cooperation. Africa supports and will actively participate in the Global Development Initiative and the Initiative on Partnership for Africa’s Development, both of which are Chinese led initiatives.Further, Africa expects greater support from China for herindustrialisation and fight against the pandemic. Africa stands ready to contribute to high-quality Belt and Road cooperation for people’s well-being and common prosperity.

[Stephen Ndegwa is a Nairobi-based communication expert, lecturer-scholar at the United States International University-Africa, author and international affairs columnist]

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Which sectors received the most foreign investment?

The most promising sector for investment in Africa is agriculture, as it is one of the critical infrastructure areas that the continent needs investment in to industrialise and reduce unemployment.

Title:

Content: OP-ED Opinions

Africa Investment Forum: A Continent; Its Destiny And Capital, By Fredrick Nwabufo

The Africa Investment Forum, a conference where the finest melange of the continent’s leaders and policymakers on one side — and investors, big businesses, critical industry players on the other wing — converge to discuss, decide and transact deals on exigent matters affecting Africa such as healthcare, food security, electricity, and transportation will take place this year from December 1 to 3 in Abidjan, Côte d’Ivoire. The Forum which began in 2018 is a solution-primed initiative to create targeted investments and capital for the continent to meet its infrastructural needs.

The Africa Investment Forum Market Days event brings together investors, project sponsors, transaction advisors, legal and other applicable professionals under ‘one roof’ to engage and continue the process of addressing the continent’s investment gap. The inaugural Africa Investment Forum 2018 (AIF2018) boardrooms convened investors, project sponsors, and transaction facilitators around 63 deals valued at $46.9 billion. Also, the platform mobilised investment interests across 49 of these boardroom deals worth $38.7 billion — across 24 countries. The 2019 edition (AIF2019) upped the ante. AIF2019 featured 57 boardroom deals valued at $67.7 billion and succeeded in crowding-in investment interests across 52 deals worth $40.1 billion from 25 countries.

Akinwumi Adesina, president of the African Development Bank; Africa50, Afrexim Bank, the Africa Finance Corporation, the Development Bank of Southern Africa, the European Investment Bank, the Islamic Development Bank, and the Trade Development Bank set up the Forum as a transaction hub where real investment deals for Africa are concretised – so the Forum is essentially a dividend-deliverer and not a chatter assembly.

According to AfDB’s economic outlook on Africa (2018), the continent’s infrastructure needs amount to $130–170 billion a year, with a financing gap in the range $68–$108 billion. Clearly, Africa needs investment in critical infrastructure – power, transportation, water, agriculture, etc — if it must industrialise and bridge the deficit, as well as reduce the unemployment of millions of youths. This underscores the viability of the Forum.

The theme of the 2021 edition is “Accelerating Transformative Investments in Africa”. Sessions focusing on the five investment sectors that received priority under the Forum’s Unified Response to COVID-19: agriculture and agro-processing; energy and climate change; health; ICT/Telecoms; and industrialisation and trade will be elemental to the programme.

In addition, sector-specific discussions at this year’s event will include energy and climate –including reflections on November’s COP26 summit in Glasgow, UK – agriculture and agro-processing; health; ICT and telecommunications; and industry and trade.

Nigeria has been a principal feature in the Africa Investment Forum since 2018. In the 2018 edition, out of the 63 boardroom deals presented at the Forum, Nigeria had five deals worth $7 Billion. This represents 14.9 percent of the total deals accounted for on the continent, and 43 percent of the deals accounted for in the region.

The AfDB, facilitator of the Forum, had said it would help Nigeria to bridge its infrastructure gap estimated to cost about $3 trillion in the next 26 years. According to Ebrima Faal, former director AfDB, Nigeria and director of operations committee secretariat, Nigeria’s infrastructure cumulative financing needs are estimated to reach $3 trillion by 2044 or about 100 billion dollars annually.

The Africa Investment Forum offers Nigeria a smorgasbord of opportunities to attract the needed investments to the country. And as always, a high-level delegation of the Nigerian government and captains of industry from Nigeria are expected to be at the Forum this year.

The Africa of the future will be driven by infrastructure. But to achieve that future, infrastructure-led investments are critical – most especially in this time of global economic peril brought on by the COVID pandemic.

Africa needs more accessibility for citizens within the continent; it needs better healthcare; it needs to achieve food security, have stable power supply, affordable internet connectivity, technology innovation, good transport system, and ensure the safety and security of its populace. It all starts with the right investments.

By Fredrick Nwabufo; Nwabufo is a writer and journalist
Instagram/Twitter/Facebook: @FredrickNwabufo

Sourced From Sahara Reporters

Related posts

Which sectors received the most foreign investment?

Agriculture is a promising sector for investment in Africa, as evident from its prioritization under the Africa Investment Forum's Unified Response to COVID-19.

Which sectors received the most foreign investment?

Agriculture is a promising sector for investment in Africa, with potential for value addition in commodities like rubber and oil palm.

Title:

Content: Africa: Finance Minister Samuel Tweah Outlines Issues Affecting Investments in Africa At Choiesul Forum

Nice — Finance Minister Samuel Tweah was among four speakers chosen to open the CHOIESUL FORUM.

The Choiseul Africa Business Forum, a place of cross-fertilization, aims to give key for analysing the growth-generating sectors in Africa and gather, on an interactive mode, African and European leaders to develop a collective intelligence and to contribute to the opening of new scopes of partnerships with the continent.

Speaking to investors Min. Tweah made a compelling case for Africa and Liberia, to thunderous applause from the audience.

He argued that investment challenges in Africa are far more than business climate issues. He argued they are also geopolitical. Geopolitical intetest in Africa from big powers can catalyze investment flows to Africa. He noted that this happened for South Korea which received from the US some USD 2.5 billion in the 50's, an amount that was equal to what the World Bank lent to all countries in the same year.

Minister Tweah noted that Africa has also received only 3 percent of OFFICIAL DEVLOPMENT ASSISTANCE since 1960, wondering if Africa is receiving such paltry amount where has aid been going, with the audience bursting in applause.

He further argued that AFRICA'S share of PPPis small and is concentrated in only 7 countries, saying that if investors went by that statistics, they would be investing in only 7 countries.

For Liberia, the minister presented Liberia as a commodity dependent country which rises and falls with the ups and downs of commodity prices of iron ore and rubber. He invited investors at the Forum to invest in value addition in Liberia as a way of stabilizing and growing the Liberian economy.

The Minister made the case for RUBBER and OIL PALM. He noted that just by adding a small 30 percent value to LIBERIAN RUBBER an investor can experience huge profit margins over current price levels.

Minister Tweah also touted the VIA RESERVOIR PROJECT as the FLAGSHIP CARBON SAVING RENEWABLE ENERGY PROJECT in the Energy sector, with the potential of producing as high as 800 megawatt of electricity. With the CLSG lines running through Cote d'ivoire Liberia Sierra Leone and and Guinea, the Mininier noted that investors should take a look at the feasibility report of this investment.

Minister Tweah informed investors that the Government of Liberia is moving toward a National switch in the digital space, an outcome that will provide boost for the digital economy. He invited digital companies and investors to follow this development.

Minister Tweah touted the recent macroeconomic. performance of Liberia as outstanding, describing the drop in inflation from 31 percent to 6 percent as arguably one of the greatest inflation collapses in history.

He noted that France and developed countries are taking a new look at Liberia on account of the strong policy decisions of the Government of President George Manneh Weah.

He described efforts to reform the Liberian business climate and the Judicial Conference led by Chief Justice Francis Korkpor.

Minister Tweah presented Liberia as having the most generous incentive regime in Africa for investors.

Prior to coming to NICE, MINISTER TWEAH held meetings with 10 companies in PARIS, who are looking to find opportunities in Liberia.

Minister Tweah returns to Liberia on Sunday where he is expect to join discussion on the national budget which is currently before the National Legislature.

AllAfrica publishes around 700 reports a day from more than 100 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

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What are the outcomes of increased agricultural investments in Africa?

Which sectors received the most foreign investment?

South Africa is an important trade partner of China, being one of the largest exporters to China from Africa and a major buyer of Chinese goods.

South Africa is an important trade partner of China in Africa, as evidenced by the mention of South Africa in the context of economic interactions with China.

The value of new projects announced in Egypt in 2021 was $5.6 billion.

Title:

Content: « Money » monitors the forecasts of economic analysts for foreign investment flows in the current year
A number of them predicted it would reach $10 billion.
Samar Al-Sayed
Praying for Mahmood
6: 59 AM, Wednesday, 27 Jul 22
Wael Ziadeh: The Russian-Ukrainian war is an opportunity for the Egyptian stock exchange to attract more capital
Esraa Ahmed: Clean energy, infrastructure and digital financial services are the most attractive sectors
Hani Geneina: Companies should be encouraged to reinvest their profits instead of transferring them to parent entities abroad
Naaman Khaled: Most of the money will come from Gulf markets
The Egyptian government aims to increase foreign direct investment flows, especially the Gulf, in the local market in the coming period, in light of the repercussions of the Russian-Ukrainian war on the global and local economies, and a number of analysts and macroeconomic experts estimated the value of these investments to reach $10 billion, driven by various factors, including the decline in the stock prices of companies on the stock exchange, and the exchange rate of the pound against the dollar.
The latest report issued by UNCTAD in June on the volume of foreign investment flows in 15 African countries last year showed that Egypt ranked second in the list, recording the volume of flows about 5.122 billion dollars compared to 5.852 billion in 2020 compared to 9.010 billion in 2019.
South Africa came first last year with a 1,235% jump in investment inflows of $40.889 billion compared to $3.062 billion in 2020 and $5.125 billion in 2019.
Wael Ziadeh, founder and CEO of Zela Capital, said that the Russian-Ukrainian war had negatively affected foreign direct investment flows in the world, while inter-state assistance had increased to counter the negative consequences of the war.
He explained to Al-Mal that these negative effects included the exit of investment flows from some emerging countries, which led to the impact of their trade balance, especially as their imports of food and oil more than their exports, for example Turkey and many European countries, as well as Sri Lanka.
On the other hand, the war represents a positive area for these countries, especially in activating the stock market sector, he said, adding that in this context, the Egyptian Exchange has opportunities to attract more foreign investments in the coming period.
He predicted that Egypt will take no more than six months to recover its trade balance once the war is over, as the prices of petroleum products and food will fall rapidly, as they rose rapidly after the outbreak of the war.
The objectives of the Egyptian government published in July 2021 in the second and final review report of the Credit Standby Arrangement Program signed with the International Monetary Fund, amounting to about $5.4 billion, indicated that the percentage of net foreign direct investments of GDP will rise to 2.5% in the current fiscal year compared to 2% in the last fiscal year, adding that it recorded 1.4% in the fiscal year 2021 / 2020, 2% in 2019 and 2.6% in 2019. / 2018.
These targets pointed out that the proportion of net foreign direct investment will jump to 3% of GDP in the fiscal year 2025 / 2024 compared to 2.9% in 2023 / 2024.
The government also expected in the report to increase the volume of foreign direct investment flows in the local market to about 11.7 billion in the current fiscal year against 8.6 billion dollars in the last fiscal year 2022 / 2021 to rise to 14.9 billion in the next fiscal year (2023 / 2024) and 16.5 billion in 2025 / 2024.
According to the Central Bank of Egypt ’ s forecasts issued in its statistical bulletin for May, the proportion of net foreign direct investment in GDP declined to about 1.3% in the fiscal year 2020 / 2021 compared to 2% in the fiscal year 2019 / 2020, adding that it was 2.7% in the fiscal year 2018 / 2019 and 3.1% in the year 2017 / 2018.
Economist Hani Geneina predicted that the value of net foreign direct investments in the local market will exceed 10 billion dollars in the coming period, due to several different factors, including the decline in the prices of shares of companies in the stock exchange and the exchange rate of the pound against the dollar.
However, Egypt was the second largest recipient of foreign direct investment in the African continent, he said, adding that recent pledges from Gulf countries to invest about $22 billion in various sectors will boost foreign direct investment in the future.
The number of new green projects in Egypt has more than tripled to $5.6 billion, according to the UNCTAD report, pointing out that for example, the UAE real estate company Reportage announced a real estate project worth $1.5 billion.
According to the report, the volume of foreign direct investment flows to North Africa declined by 5% to $9.3 billion last year.
Geneina told Al-Mal that the flows of foreign direct investments to the markets are divided into three types, the first is the acquisition of one company on another by more than 10%, pointing out that this investment happened last fiscal year, such as the acquisition of the UAE Holding “ADQ ” on several Egyptian companies, pointing out the importance of this type of investment, but it is not very useful in the list of foreign investments.
This type of rapid investment is encouraged by the decline in both stock prices on the stock exchange and the exchange rate of the pound against the dollar, as well as the recent government stimulus measures that included the implementation of the state ownership document.
The document of state ownership announced by the government in mid-June revealed the most prominent sectors that will witness the stabilization or reduction of government investments (while allowing the participation of the private sector), a number of activities in the transport, education, mining, real estate, electricity, telecommunications and sports sectors.
Geneina said that the second type of flows is the reinvestment of a foreign company present in the market for its profits again, pointing out that this type is classified in the balance of payments as foreign direct investments.
He added that the most prominent local sectors that will go to this type of investment is oil and gas, due to the high value of its profits achieved last fiscal year, and will therefore reinvest its large financial surpluses during the current fiscal year.
He pointed out that the third type of investment is the most difficult, which is the establishment of a new company or project from the beginning, and the employment of new workers, pointing out that for example, Dana Gas announced that it will expand its operations implemented in the local market.
This area is likely to witness an increase during the current fiscal year, especially in the oil and gas sectors and related sectors, namely petrochemicals and fertilizers, especially by Gulf investments in light of the features announced recently by the government, namely the state ownership document, the gold license, as well as the large financial surpluses they have, which motivates them to invest in the local market.
In mid-May, Prime Minister Mostafa Madbouly announced a number of concessions on the industrial sector, most notably the issuance of the golden license for some projects, pointing out that it will be granted once and include three areas as a start, namely green hydrogen, electric car manufacturing and infrastructure, seawater desalination projects and renewable energy.
Geneina stressed the importance of the government encouraging foreign companies to reinvest their profits in the local market instead of transferring them to parent companies abroad by providing incentives to urge them to take this step.
According to the latest UNCTAD report, Mozambique ranked third in the list of foreign investment flows to 15 African countries last year, and its inflows rose by 68% to $5.102 billion compared to $3.035 billion in 2020, while it recorded 2.212 billion in 2019.
Nigeria ranked fourth on the list, attracting inflows of 4.844 billion over the past year, an increase of 103 percent from the previous year, the data added, adding that it recorded 2.385 billion in 2020 and 2.305 billion in 2019.
Ethiopia followed in fifth place, and foreign direct investment inflows increased last year by 79% to $4.259 billion compared to $2.381 billion in 2020.
In the sixth place came « Congo » with the volume of flows of $3.691 billion, a decline of 8% from its value in 2020, and recorded 4.016 billion dollars, followed by Ghana in the seventh place in the list and increased flows by 39% to reach 2.614 billion dollars during 2021 compared to 1.876 billion in 2020.
According to data from the UNCTAD list, foreign direct investment flows in Senegal jumped by 21% to 2.232 billion against 1.846 billion dollars in the previous comparison period.
According to the report, the value of flows to Morocco increased by 52% last year to $2.153 billion, and a major international financing deal was announced there, a $20 billion construction project for a 3,800km transmission line to the UK with a capacity of 3.6 gigawatts, sponsored by English company Xlinks.
The Democratic Republic of the Congo ranked 10th on the list, with investments up 14% to $1.870 billion compared to $1.647 billion in 2020.
Gabon came in eleventh place, with direct investment flows falling by 5% last year to record 1.635 billion dollars compared to 1.717 billion in 2020, followed by Uganda, with flows rising by 31% to 1.142 billion dollars compared to 874 million in 2020.
Tanzania ranked 13th, with foreign investment up 35 percent in 2021 to $922 million compared to $685 million in 2020.
According to the bulletin, investment flows in Algeria decreased by 24% last year to $870 million compared to $1.143 million in 2020, pointing to the decline of investments in Tunisia to $660 million compared to $652 million in 2020 to be ranked 15th.
Esraa Ahmed, a macro-economic analyst at the investment bank “Ahly Pharos ”, agrees with Geneina ’ s opinion as she expects the volume of net foreign direct investment in Egypt to rise to about $10 billion during the current fiscal year (2022 / 2023), up from levels that will not exceed $7 billion in the fiscal year ending 2021 / 2022.
She added that this rise is driven by the Gulf investment flows that have been announced recently, and the acquisition deals that we see are witnessing activity during the current period.
There are other factors that may prevent net foreign direct investment from rising to larger numbers in the near future due to the continuation of the war in Ukraine and its repercussions on the global economy.
According to Ahmed, these factors are the economic situation of the European Union, which is an important partner for Egypt in terms of trade and investment, in addition to the general reluctance globally to risk starting new projects, and the prevailing outlook for emerging markets and the risks of their currencies.
On the sectors that may witness foreign inflows during the coming period, she said that the most prominent of them are clean energy, new infrastructure driven by the expansion of the state in this field, in addition to digital financial services, and some branches of manufacturing industries.
For his part, Numan Khalid, a macro-economic analyst at Arqaam Capital, said that the current circumstances in the world prevent the possibility of predicting the volume of foreign direct investment flows in the local market during the coming period.
He added that most of the investments come from the Gulf market, especially from Saudi Arabia and the UAE, pointing out that these two countries have benefited greatly from the recent increases in oil prices, and thus have a great financial solvency through which to invest in surrounding countries, especially in Egypt, which is one of their target markets.
He pointed out that health, hotels, real estate and the financial sector will witness an increase in the volume of investment flows to them during the coming period.
During his participation in the Qatar Economic Forum last June, the Minister of Finance, Mohamed Maait, looked forward to increasing the volume of Gulf investments with the transformation of their deposits in Egypt into real investments that benefit from the promising development opportunities available in various fields.

India has invested heavily in infrastructure development in Africa, with a focus on reviving the Asia Africa Growth Corridor project.

Which Asian countries are investing in Africa?

Which countries are actively investing in Africa besides China?

Europe, U.S. Japan, South Korea, India
India

The growth rate of Foreign Direct Investment into Africa over the past year was 11%.

Title:

Content: Free zones may be Africa’s best chance to accelerate wealth creation

By Sylvia Brune

Co-founder of AHOY – a flight booking and concierge app – Sylvia Brune discusses why free zones may be Africa’s best chance to accelerate wealth.

Given the demand for goods and services from Africa’s growing middle classes, the continent has huge potential for growth. Over the past year, Foreign Direct Investment (FDI) into Africa grew by 11%, bucking the global trend and potentially setting a bright precedent for the future.

Whether this upwards trend in FDI will have a positive effect on growth and wealth creation is, however, still unknown. Studies have shown that capital has little impact on an undeveloped foundation. Key components needed to enhance capital’s productivity are infrastructure (not just physical), a stable and transparent legal framework, and skilled labour.

Where these are lacking, investors into the continent have to first ‘build’ the commercial foundation, before commencing their projects. Like spending money on hiring advisors, lawyers, and accountants to navigate the various countries’ economic environments, political systems, and bureaucracy. This adds time and uncertainty to projects, acting as an effective ‘tax’ on any return on investment - meaning only projects with a very high upside will be embarked upon.

Evidence suggests that these key components are indeed lacking across most of Africa, albeit with a small handful of countries on the road to improvement.

Countries, like Senegal and Côte d'Ivoire, have made important strides to improve anti-corruption institutions. Cabo Verde and Gambia have managed to gain local trust with 85% and 84% believing their government is fundamentally sound. And Mauritius and Rwanda have made it into the top 35 countries in the world as measured by economic and personal freedom, with Mauritius marginally beating Norway in the global ranking.

The reality is, however, that corruption continues to undermine the rule of law across most of Africa (which hosts 13 of the globe’s 20 most corrupt countries). Rule of law relates to strong property rights, government integrity, and judicial effectiveness - the basis for a sound investment environment. What is even worse than corruption’s effect on FDI, though, is its effect on retaining and developing talent.

Instability and lack of opportunity continues to result in brain-drain - drawing talent and skill away from the continent. The World Bank estimates one-in-nine Africans with a tertiary education live away from Africa – a 50% growth since the mid-00s.

So, what’s the solution?

Given the long, tough road ahead towards building economically sound environments across Africa, I believe the only solution in the short run, is establishing 100s of Special Economic Zones (SEZs) throughout the continent.

For those unfamiliar with SEZs, they are areas which operate under a different legal framework to the country they inhabit – with investment-friendly laws around commercial transactions, taxes, and the protection of private property. SEZs’ advantage is that you avoid building on top of broken legacy system, instead creating a pre-packaged, investor-ready climate.

These zones have been successfully tested and run in China and the Four Tigers (Hong Kong, Singapore, South Korea and Taiwan) to attract considerable FDI, and experience decades of double-digit growth. This format could likewise be used to boost and sustain investor interest in Africa.

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SEZs as talent hubs

While SEZs are known mostly as attractive investment environments, with conducive infrastructure and legal frameworks, the secret to their success rate is actually in their ability to attract and retain talent and skilled labour in specialised hubs.

China showed just how powerful an industry focus within SEZs can be. Because they provide a magnetic effect of highly specialised knowledge hubs - comprised of domestic, regional, and international talent.

Capital is like fuel, it’s only effective where there is a flame to throw it on. And that flame is talent.

The potential is clear, and I believe Africa has a burgeoning pool of talent waiting to be tapped into. But whether they are able to put their talents to best use, collaborate, and innovate freely is uncertain, and will determine whether they stay, or search for opportunities elsewhere.

A common hurdle, for example, is work visa rules between African countries, which means it’s easier for talent to find good opportunities outside Africa than within Africa. Talented individuals want to work alongside other talent. Similarly, talent and specialists from outside Africa face considerable barriers when trying to obtain work permits.

For example, Mr. Eazi’s emPawa Masterclass, like many creative undertakings, is dependent on bringing together the best talent. Earlier this year, emPawa struggled to bring artists, producers, and mentors together from across Africa. Due to visa rules and uncertain processing times, some were only provided with visas after the masterclass was already over, some not at all.

Here, again, SEZs are a solution. SEZs are able to receive visa allocations relating to their area of specialisation, which increases the likelihood of collaboration and innovation - which in turn attracts capital.

The Andela example

There’s plenty of evidence that talent wants to stay, provided there are the right conditions to do so. A great example is tech recruitment platform Andela, which proves that when start-ups in Africa have access to the best talent, including a global support network, and then tap into local opportunity, they can raise substantial foreign capital, and the local business community benefits as well.

Andela trains candidates for six months before pairing them with clients, many are the Fortune 500 and a number of Silicon Valley start-ups. So far, more than 90% of Andela’s first batch of alumni are still working in Nigeria.

SEZs would be able to turbocharge the work of companies like Andela. After talent has been developed, they need environments where they can make most use of their skills.

Already, countries like Mauritius, Senegal, and Rwanda have and are in the process of creating SEZs, with the view to building infrastructure, a stable legal framework, and enticing skilled labour – it’s an exciting time and I for one, am eager to see the results as more African countries follow their footsteps.

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