Foreign investment in African countries has experienced notable fluctuations over recent years, shaped by global events and the continent's evolving economic priorities.

As students at the University of Nairobi prepare for careers in business administration, understanding these foreign direct investment (FDI) trends offers valuable insight into expanding opportunities spanning diverse industries and regions across Africa.

**FDI Trends and Figures: 2018–2024**

Between 2018 and 2024, Africa’s FDI inflows have demonstrated resilience amid challenges.

The Covid-19 pandemic caused a sharp 16% decline in FDI to $40 billion in 2020, down from $47 billion in 2019 .

This was followed by a significant rebound in 2021, with a record $83 billion in investment inflows, more than doubling the previous year’s figures .

However, global uncertainties affected growth in 2022, with inflows dropping to $45 billion.

Despite this, Egypt stood out by more than doubling its FDI to $11 billion, driven by cross-border mergers and acquisitions .

Projections for 2023 and 2024 suggest cautious optimism, with expectations for steady growth influenced by renewed investor confidence and government reforms fostering investment-friendly environments .

**Geographic Distribution: Key Countries and Regions**

The highest concentrations of foreign investment recently have been in South Africa, Egypt, Mozambique, Nigeria, and Ethiopia.

South Africa led in 2021, attracting nearly $40.9 billion, affirming its position as a regional economic hub with diversified sectors appealing to investors .

Egypt and Mozambique each received approximately $5.1 billion, while Nigeria and Ethiopia captured 5.8% and 5.1% of Africa’s FDI inflows respectively .

Regional growth is primarily strong in South, East, and West Africa, while North Africa experienced a slight overall decline, tempered by Morocco’s 52% investment increase in 2021, notably catalyzed by a $20 billion wind energy export infrastructure project to the UK .

West Africa continues gaining prominence as a venture capital hotspot, with over 700 deals valued above $1 million between 2019-2023, led by Nigeria and Ghana’s burgeoning fintech hubs .

**Industry Focus: Emerging and Sustained Sectors**

FDI in Africa spans multiple sectors, with energy, extractive industries, technology, finance, agribusiness, infrastructure, and manufacturing leading.

The transition towards clean energy is prominent; commitments to energy and gas projects surged from $24 billion in 2021 to about $120 billion in 2022, reflecting global momentum for sustainable power .

Renewable energy initiatives doubled international projects in Africa from 36 in 2011 to 71 in recent years, including significant wind farms and solar developments .

Mineral-rich sectors maintain steady appeal, with cobalt, lithium, copper, and nickel essential for electric vehicles attracting sustained investor focus, particularly in the Democratic Republic of Congo, Zambia, and Zimbabwe .

The fintech sector is rapidly maturing, projected to rise to $30 billion revenues by 2025, and has spawned many African unicorns, underpinning Africa’s digital transformation trajectory .

Pharmaceuticals, agro-processing, and infrastructure development round out sectors gaining foreign capital, aligned with Africa’s industrial diversification goals .

**Major Investors and Representative Projects**

European countries dominate FDI sources, with the United Kingdom and France investing $65 billion and $60 billion respectively, primarily in oil, gas, mining, and finance sectors .

American companies, including those participating in Prosper Africa, alongside Chinese firms investing heavily in infrastructure, remain crucial players, albeit facing scrutiny over construction quality on some projects .

Japanese and South Korean conglomerates such as Toyota, Nissan, Samsung, and Hyundai have expanded automotive manufacturing and technology services across Africa .

Noteworthy projects include BP’s LNG developments in Senegal and Mozambique, Shell’s explorations in Namibia, and Perenco’s LPG facility expansion in Gabon and Congo .

The $20 billion wind power export project from Morocco to the UK exemplifies large-scale renewable investments facilitating global energy transition linkages .

**Recent Partnerships and Collaborative Ventures**

Strategic collaborations between African entities and foreign investors have increased, highlighting equity partnerships, joint ventures, and co-development initiatives.

In Angola, French agribusinesses such as CFCAI Group and COOPEX enhance dairy and feed production through partnerships supported by governmental facilitation [11].

East and West African tech startups like Kenya’s Komaza and NewGlobe Education have attracted venture capital from funds including Novastar Ventures and British International Investment, evidencing investor confidence in scalable, impact-driven businesses [6].

Regulatory measures in Mauritius, South Africa, Ghana, and South Sudan mandating local participation (25-40%) encourage inclusive growth while protecting investment returns .

International platforms such as the Taiwan-Africa Entrepreneurs Association and the African Energy Week foster networks cultivating cross-continental commerce and innovation [3].

**Career Opportunities for Business Graduates**

The expanding foreign investment ecosystem in Africa offers diverse career avenues for business administration graduates.

Demand is strong for professionals skilled in project management, financial analysis, investment banking, and compliance within energy and infrastructure development projects .

The burgeoning tech sector creates opportunities in venture capital management, startup business development, digital marketing, and data analytics, particularly within fintech innovation hubs .

Agribusiness and pharmaceutical industries require expertise in supply chain management, export marketing, and regulatory affairs .

The prevalence of mergers and acquisitions highlights roles for specialists in negotiation, corporate governance, and international business law .

Graduates with cross-cultural competencies, proficiency in investment appraisal, and agility in navigating multinational partnerships will be especially sought after.

The African Continental Free Trade Area (AfCFTA) is poised to further expand intra-Africa trade and regional value chains, enhancing market integration and investment flow .

Complemented by government incentives such as tax breaks and profit tax reductions, this macroeconomic framework favors business professionals with international business acumen and strategic management skills .

Challenges persist, including infrastructural deficits and energy shortages, but these gaps foster demand for innovative solutions and experienced investment professionals to lead Africa’s ongoing economic transformation.

**Conclusion**

Foreign investment trends from 2018 through 2024 reveal Africa's dynamic shift towards renewable energy, technology advancement, and diversified industrial growth.

Investment hotspots concentrate in South, East, and West Africa, with European countries remaining predominant investors supported by American and Asian enterprises.

Major projects reflect a mix of energy infrastructure, extractive minerals, and digital innovations.

Strengthened partnerships between foreign investors and African firms, alongside regulatory improvements, nurture inclusive development.

For University of Nairobi business administration students, these expanding sectors and international linkages herald promising career possibilities in finance, management, and entrepreneurship aligned with Africa’s accelerating integration into the global economy.

Business graduates should focus on honing skills in project finance, international trade laws, digital transformation strategies, and cross-cultural communication to thrive in FDI-related roles.

Developing expertise in sectors such as green energy, fintech, and agribusiness will position them to capitalize on Africa’s evolving investment landscape effectively.

This comprehensive overview equips prospective business professionals with the knowledge needed to identify and pursue emerging opportunities generated by Africa’s growing foreign investment landscape.

Foreign investment in African countries has experienced notable fluctuations over recent years, shaped by global events and the continent's evolving economic priorities.

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Content: Japan, Korea and India experience to expand Africa, Taiwan and Africa entrepreneurs association
The “Taiwan-Africa Entrepreneurs Association ”, commissioned by the International Trade Bureau of the Ministry of Economic Affairs, attracted more than 130 enterprises interested in exploring the African market. The exhibition and consultation desk at the representative office showed that our company's desire to expand the African market is very hot.
The theme of the event was “The Key to Success for Foreign Investors (Japan, Korea and India) in Expanding Africa ”. The event was addressed by Wang Ximeng, Secretary General of the Foreign Trade Association, Liu William, Deputy Director of the Bureau of International Trade of the Ministry of Economic Affairs, Msibi, Ambassador of the Kingdom of Swaziland, and Chen Shu-fang, President of the Association of Taiwan Commerce. In addition, Hung Sheng Packaging General Manager Tang Jung-hung, Yi Ho Industrial General Manager Fu Yang-li, and Nam Wei Industrial Strategy Director Yang Wei-han analyze the development opportunities in Africa from their practical experience in the packaging, building materials, and textile industries.
Wang Ximeng, secretary general of the Foreign Trade Association, pointed out that in addition to the competition between Europe, America and China over the layout of the African continent, Japan, South Korea, India and other countries in Asia are committed to increasing investment and economic cooperation in Africa.
There are more than 1.3 million people of Indian descent in Africa, such as in East Africa, where more than 60% of the economic lifeline is controlled by Indians.
In addition, 18 of India's 25 newly established embassies and consulates are located in Africa, and India has become the fifth largest investor in Africa, while Japanese automobile manufacturers Toyota, Nissan, and electrical appliance giant Toshiba have already planted flags in Africa; South Korea's Hyundai, Samsung, LG and other large enterprises have also been stationed in Africa.
Through this event, we hope to help our business people to learn from foreign companies such as Japan, Korea and India, as well as African market leaders, and shorten the path to enter the African market.
Liu, deputy director of the International Trade Bureau, said that in recent years, the global economy has continued to be volatile due to changes in the international situation such as Sino-US trade frictions, global inflation, and the Russian-Ukrainian war, but Africa has shown great resilience during this period.
In addition, foreign direct investment in Africa reached US $45 billion in 2022, which has returned to the pre-epidemic level, indicating that confidence in investment in Africa has gradually recovered. In 2022, the total import and export value of Africa reached a new high in recent years, with imports reaching US $694.5 billion, up 14%, and exports reaching US $661.4 billion, up 19%. It is hoped that through the activities of the association, upstream and downstream companies in various industries can learn from each other and share their experiences, and work together to promote Taiwan-Africa economic and trade relations.
The event will be held in conjunction with AGOA, a major textile manufacturer in South China, and the representative offices of African embassies in Taiwan, Africa-related associations, and import and export banks providing trade and financial services. For more information, please visit africa.taiwantrade.com for more information.

As students at the University of Nairobi prepare for careers in business administration, understanding these foreign direct investment (FDI) trends offers valuable insight into expanding opportunities spanning diverse industries and regions across Africa.

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Content: Tuesday 31 October 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
In Arabic
Le Dialogue in Arabic
Olivier Duzon writes about African youth.
The Democratic Republic of the Congo is fully aware of its appeal and wants to take advantage of it!
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With young people protesting and demanding the principle of sovereignty at a time of multiple options for Africa and growing partners: China, India, Russia, Turkey, the United States and the Europeans.
There is no doubt that France has no alternative but to reinvent itself in order to maintain its presence on this continent and play a decisive role there, right?
By 2050, Africa will have a population of 2.5 billion and Europe only 450 million.
The question arises, is Emmanuel Macron prepared to face this real tidal wave when Africans demand radical change?
Dominique de Villepin, former prime minister of France, says anti-Western sentiment is growing on a large scale and if we look at the BRICS and Africa we can clearly see how Africa is turning against us and how it seeks to ensure France ’ s exit from Africa.
There is a very strong feeling and we would be wrong to talk about neutrality and this ability to play on an influential power in the world is certainly an element that works in Russia ’ s favor and let ’ s not forget that.
In this context, there is a striking common point: it is the desperation of young people, especially in French-speaking Africa, they are angry with their leaders and want to flee, they are conservative from a societal point of view and they are strongly opposed to the ideology of vigilance, the LGBT movement and the new ecosystem.
There is a deep misunderstanding today of the new African realities.
Countries where young people are of great importance.
These young people get their information through social media and we don ’ t have the means to reach them.
We work according to antiquated systems.
Asked about the future of the French presence in Niger, the former prime minister and foreign minister said the channels must be preserved, because there is nothing worse than an empty table.
About these young people in particular, France has opened the gate to its new strategy, in an attempt to restore its political image and push its arms in the economic field, which has seen its decline dramatically.
The Africa-France Summit, which in October 2021 brought together young people from the diaspora in Montpellier, is the summit that France will not witness.
The level of discussion was also eloquent in terms of speeches, for example: “If the relationship between African countries and France were bumpy, it would be dirty. ”
If France has shown its desire to restore the economic leadership assumed by China and to a lesser extent Turkey, such as the management of the airports of Abidjan, Niamey and Dakar in many French-speaking countries, Emmanuel Macron ’ s African tours in July 2022 (Cameroon, Benin, Guinea-Bissau) and March 2023 (Gabon, Angola, Congo and DRC) have highlighted the strong rivalry with the Kremlin.
Journalist Restil Chonand interviewed La Tribune for Africa and especially a panel of African businessmen on the position France should adopt in the light of the new Africa, including Valéry Houphouët-Boigny, Paul Obambe and François Jean Bellot.
The Russian strategy is based on what the African street says, and I believe that Russian propaganda in Africa is not directed at Africans, but is aimed at destabilizing the Western powers (the United States and France).
The president of the African club AEGE said she believes Moscow favors Beijing: “The Sino-Russian alliance is very clear at this level, and if France – and Europe more broadly – finds itself in the midst of the war between the United States and China, it will have no room for maneuver on its part.
It is a trap that must be avoided. ”
At the same time, the French president has problems with his diplomatic approach, especially with regard to monetary issues linked to the CFA franc, comments often considered offensive, notes Restelle Chonand.
Disruption of Paris
In fact, France has assets that have not been exploited properly, because they say that France ’ s rejection in Africa is a political rejection, not to mention that it is largely tied to President Emmanuel Macron ’ s patronizing position, but not an economic one.
I see him as a business leader working in Africa; in countries where we supposedly don ’ t like France, we like working with French companies.
So people may not like the French president ’ s remarks, but they continue to work with French companies, as François Jean Bello, secretary general of IE Africa Conference and founding director of Troffer N MediaTec, testifies.
Paris can count on itself to regain its economic status, not as a power but as a partner.
France has an advantage over the United States because American companies are little known in Africa, said Valery Houphouët-Boigny.
What ’ s more, we cannot ignore the Francophonie, and the question that arises is: “Why does France not play the Francophone economic card? ” asks François Jean Bellot, pointing out that the“ Commonwealth ” should be an inspiration for the “Francophone ”.
As the president of the African Business Club said: “Speaking of the alliance, we are approaching the African scale of value, with this alliance of French-speaking business people that brings together all French-speaking employers in Africa, France is once again becoming a legitimate actor like Ivorian, Moroccan, Congolese, Cameroonian, Burundian and other businessmen. ”
Diversification of partners
Faced with this international desire to seek Africa, its leaders today called for diversification of partners.
There may be an obsession in the United States about Chinese activities on the continent, but this obsession does not apply to China, and Ghanaian President Nana Akufo-Addo said that all countries are our friends, and we have relations of varying degrees of strength with each.
On the subject of Russia, Cameroon ’ s President Paul Biya, like the majority of his peers, refused to condemn the Russian invasion of Ukraine.
“In fact, Africa is clear enough and our countries still have resources, including environmental resources.
We have to make good use of it.
Countries must choose the partners that offer the best deals, the best quality at the best price.
If these companies are French, American, Russian or Chinese, they will be selected as part of a win-win partnership, ” said Paul Obambi, chief executive of SAPRO, a major industrial group in Congo-Brazzaville.
Valery Houphouët-Boigny, at the level of countries, companies and individuals, points out that economic interests are at the center of African concerns: “We are studying what each partner can contribute, highlighting in particular the growing number of Africans who are training in economic intelligence.
Congo and its gravitational pull
The Democratic Republic of the Congo is the largest French-speaking country in the world, with over 108 million speakers, and the cradle of natural resources: it is the world ’ s leading producer of cobalt with nearly 70% of its production and more than 50% of the world ’ s reserves; a Third World producer of copper with large deposits of manganese, chromium and lithium, not to mention coltan, a rare and strategic mineral. It is mainly used in the manufacture of capacitors for electronic equipment but is also used in the synthesis of cobalt-nickel alloys in aviation and especially in the manufacture of reactors, of which the Democratic Republic of the Congo is one of the major producers on the planet.
They are valuable resources for the global ecological future, not to mention vast forest reserves.
The wealth of the Congo.
President Félix Tshisekedi has declared that the global transition to green energies and decarbonization that has stimulated demand for electric vehicles cannot be achieved without the so-called strategic minerals of the Democratic Republic of Congo, which are crucial to the rest of the world.
Our current position as a source of raw metals puts us at the bottom of the global value chain of a market that will reach $8,000 billion by 2025, of which we receive only 3%.
Our ambition is therefore clear, and he explained to the applause that it is for us to promote the local transformation of natural resources and to place the DRC at the heart of the regional green value chain for the production of electric vehicles.
France and Africa
Michel Lucimbi, a financial adviser, former president of the Union of Congolese Banks and vice president of the Federation of Congolese Companies (FEC), says that if it weren ’ t for the war in eastern Democratic Republic of Congo, Emmanuel Macron ’ s trip would have been as good as all the visits of former French presidents.
The Central African country has no colonial past with France and Macron ’ s agenda has been essentially political, between restoring France ’ s status after its decline in West Africa and wanting to return the ball to Russia ’ s enhanced diplomacy on the continent, and passing the message to companies facing China ’ s economic strategy.
This is where the Kinshasa Forum came from, and I think that in the current context, the Democratic Republic of the Congo has a tactical card that it can play to benefit economically.
However, Paris ’ s new economic policy takes on greater meaning in such an important region.
Talk about partnership.
Paul Obambi, CEO of the Sabro Group and President of the Chamber of Commerce and Industry, Agriculture and Commerce, Congo, said: “The time has passed and the business environment has evolved, preceded by the development of the political environment, and we are no longer in France – Africa.
Today we have to be able to talk about partnership. ”
Olivier Duzon is a legal adviser to the United Nations, the European Union and the World Bank.
One of his most famous books is “Maritime Piracy Today. ”
And what if Eurasia is the new frontier?
India is facing its destiny, ” he said, addressing the present and future of African youth in light of intertwined developments in the positions of countries, especially France.

**FDI Trends and Figures: 2018–2024**

Between 2018 and 2024, Africa’s FDI inflows have demonstrated resilience amid challenges.

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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The Covid-19 pandemic caused a sharp 16% decline in FDI to $40 billion in 2020, down from $47 billion in 2019 .

This was followed by a significant rebound in 2021, with a record $83 billion in investment inflows, more than doubling the previous year’s figures .

Title:

Content: FDI flows to North Africa down 5% in 2021
Foreign direct investment to North Africa fell 5 percent to $9.3 billion for the whole of 2021, according to a report on “Investing in the World ” released by the United Nations Conference on Trade and Development (UNCTAD) on June 9, 2022.
These investments, towards Tunisia, improved slightly from $652 million in 2020 to $660 million in 2021.
The same investment to Morocco increased by 52 percent to 2.2 billion dollars in 2021, compared with a 12 percent drop to 1.5 billion dollars in Egypt.
Despite the decline in these investments in Egypt, it remains the second country to benefit from the inflow of foreign direct investment in Africa.
According to the same report, the flow of foreign direct investment in Africa reached a record level of $83 billion for the whole of 2021, more than double the investment achieved for the whole of 2020.
Despite this significant growth, the flow of investment to Africa in 2021 represented only 5.2 percent of the global total, compared to 4.1 percent in 2020.
Most African countries saw a slight increase in foreign direct investment (FDI) in 2021.
These investments developed in South, East and West Africa, while they maintained their previous levels in Central Africa, while declining in North Africa.
Europeans remain the most important investors in Africa, led by investors from the United Kingdom ($65 billion) and France ($60 billion).
Increased investments in renewable energy
Despite the overall positive trend of foreign direct investment towards Africa, the announcement of new projects remained weak at $39 billion and shows only a weak recovery compared to $32 billion recorded in 2020 and less than $77 billion recorded in 2019.
In parallel, the number of international projects in the field of renewable energies in Africa increased to an estimated 71 projects, almost double the 36 projects completed in 2011.
Among these projects is a $20 billion project that aims to export wind energy to the UK from Morocco.
By laying 3,800 km of submarine cables.

However, global uncertainties affected growth in 2022, with inflows dropping to $45 billion.

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Content: Chairman of the Board of Directors and Editors
I'm sorry.
Mohamad Elbaz
Chairman of the Board of Directors and Editors
I'm sorry.
Mohamad Elbaz
It has reached $11 billion.
UN highlights doubling of foreign direct investment in Egypt
The United Nations Trade and Development Board (UNCTAD) said in its annual report on foreign direct investment flows for the year 2022, on Wednesday in Geneva, that Egypt witnessed an increase in foreign direct investment more than doubled to $11 billion as a result of increased cross-border M & A sales.
Investment flows to Africa fell to $45 billion in 2022 from a record $80 billion in 2021 and accounted for 3.5 percent of global foreign direct investment, the report said, adding that international project financing deals targeting Africa showed a 47 percent drop in value.
The report pointed out that the number of announcements of new projects increased by 39% to 766, and that six of the 15 largest new investment mega projects (those worth more than $10 billion) announced in 2022 were in Africa, stressing that Egypt witnessed an increase in foreign direct investment more than doubled to $11 billion as a result of increased cross-border M & A sales.
The number of new projects has more than doubled to 161, and the value of international project financing transactions has increased by two-thirds to $24 billion.
FDI inflows have risen over the past five years in four of the continent ’ s regional economic groupings, with FDI in the Common Market for Eastern and Southern Africa (COMESA) growing by 14% to $22 billion, and inflows also rising in the Southern African Development Community (SADC) (quadrupled to $10 billion) and the West African Economic and Monetary Union (WEMU) (doubled to $5.2 billion). East African Community (up 9% to $3.8 billion).
According to the report, the largest increase in 2022 was in new field projects announced in energy and gas supply (to $120 billion from $24 billion in 2021), and the value of projects in construction and extractive industries rose to $24 billion and $21 billion, respectively, while the information and communication sector recorded the largest number of projects.
European investors remain by far the largest owners of FDI in Africa, led by the United Kingdom ($60 billion), France ($54 billion) and the Netherlands ($54 billion).

What was the total FDI inflow to Africa in 2022 and how did it compare to 2021?

$45 billion, which was down from $80 billion in 2021

Despite this, Egypt stood out by more than doubling its FDI to $11 billion, driven by cross-border mergers and acquisitions .

What trends are emerging for African startups in 2022?

significant merger and acquisition activity

Projections for 2023 and 2024 suggest cautious optimism, with expectations for steady growth influenced by renewed investor confidence and government reforms fostering investment-friendly environments .

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Content: In 2023, standards became higher than ever for global tech. Customers want to be able to buy something in two clicks but still need in-person customer service. Workers want to work digitally, ideally from a beach somewhere, while maintaining a connection with their colleagues. And the truth is these standards are unlikely to get lower soon.

In Africa, the tech scene hasn’t been any less dramatic. It was, in many ways, a market correction. Several startups shut down, while many others survived by bone-deep cost-cutting or mergers and acquisitions. Founders and investors have gone from chasing Silicon Valley-esque growth to seeking a balance with the African market. Between 2020 and 2023, African tech went from the “peak of inflated expectations” point to the “plateau of productivity” side of Gartner’s hype cycle.

Now, what’s next? That’s what everyone wants to know as we enter a new year. Predicting the future is hard and risky. But it’s even harder in the digital tech industry because, as we’ve seen in the past three years, things change fast and dramatically. However, 2023 gave several pointers to trends we should all pay attention to in the new year.

Crypto/Web3

2022 was a rough year for the crypto market. Everything went wrong, from Terra’s downfall to FTX’s scandal. But 2023 was a lot better as Bitcoin ended the year over 150% higher than where it started. The Solana blockchain also made a dramatic comeback, with its token rising over 1000%.

Why does this matter? Because price is still the main driver of the crypto ecosystem. Funding pours into startups when prices are high and dry up when prices are low. It also means the hype bubble will likely return because markets become irrational in the face of high prices.

Africa is the fastest-growing cryptocurrency market among developing economies, primarily because people seek to hedge against inflation. Young people are drawn to low-barrier opportunities to generate wealth, which is crypto’s biggest use case today.

Africa’s regulatory environment is also slowly buying into crypto. In December, Nigeria’s central bank lifted a ban on cryptocurrency transactions, saying global trends had shown a need to regulate such activities.

Artificial intelligence

AI has become the rave of the moment, thanks to OpenAI’s breakthrough with ChatGPT. The chances that an image or text you see on social media are products of generative AI are higher than ever. Every big tech player is in the race for AI dominance. Google launched Gemini in December, a few weeks after Elon Musk’s xAI launched Grok, another ChatGPT competitor.

One in every four dollars that went into the pocket of an American startup was related to AI, per Crunchbase data. According to McKinsey data, AI startups garnered over five times as much funding in the first half of 2023 as they did over the same period in 2022. Global demand for talent in this section also spiked in 2023. LinkedIn job postings that mention AI or generative AI have more than doubled since 2021.

In Africa, we are seeing more startups either focus on AI or apply it to their processes. For instance, OnePipe, a Nigerian fintech, uses artificial intelligence for fraud detection and prevention and biometric verification for customer KYC implementation. It also uses natural language processing for conversational transactions. Nokwary, a Ghanaian startup, uses speech recognition and conversational user interfaces to enable visually impaired people and those who can’t read and write to interact with banking apps and systems through spoken commands.

The biggest challenge to an AI boom in Africa is data. However, this poses a huge opportunity for research and data collection companies in the continent.

Mergers and Acquisitions

Many startups shut down between 2022 and 2023, either because they couldn’t raise more cash or because tough economic times got the better of them. But that wasn’t the only trend that emerged. Many others survive by getting acquired. Nearly 70 acquisitions have happened between 2022 and 2023, according to data from The Big Deal and BD Funding Tracker. Some notable deals were Risevest and Chaka, BioNTech and InstaDeep, Bitmama and PayDay, and FairMoney and PayForce.

Mergers and Acquisitions will likely remain a trend for as long as valuations are low. Over the last two years, startups have been more cautious about bloating their valuations, and investors have kept the same sentiment. It’s partially why we haven’t recorded new unicorns in a minute. MNT-Halan was the only new entrant in the last two years.

This also creates an opportunity for African startup marketplaces, which will replicate Acquire.com to make acquisition easy for startups with solid products but low clout.

International work for Africans

Many African countries saw their currencies devalued in 2023. Inflation rates have also spiked in many economies. This creates a stronger appeal for them to earn foreign currencies and an [almost worrisome] opening for Westerners to find cheap labour in Africa. This is crucial because wage rates are rising in China and India, making it increasingly expensive for companies to outsource services there.

Studies by Bloomberg show that China’s upper-middle class now dominates, with over 200 million urban households having disposable incomes of $16k — $34k. Meanwhile, many Sub-Saharan economies have seen their middle-class shrink in recent years.

Also, there aren’t enough opportunities for young people to work remotely in Africa. Ten to twelve million young Africans enter the labour market each year, and an estimated one-third of the 600 million young people entering the global market by 2030 will be young Africans.

This trend will create opportunities for new approaches to apprenticeship or employment matching. It also means startups focused on building tech talent will likely see growth in 2024.

New regional preferences

In 2024, investors could reevaluate their regional strategies in response to changing macroeconomic and political conditions. Per the EIU, fifteen African countries have elections next year, and investors will observe their outcomes keenly. Elections are fraught with risk, especially in regions where armed conflict is rampant. The EIU notes that elections in Algeria, Egypt, Ghana, and South Africa will add to political risk, which could have long-term implications on where investors put their money.

An AVCA survey revealed that LPs favoured investing in West Africa while GPs leaned towards East Africa. The data aligns with this: between 2019 and 2023, per The Big Deal, there were over 700 recorded deals worth $1m or more. West Africa led the pack with 246, East Africa with 175, Northern Africa with 160, Southern Africa with 147, and Central Africa with 14. Depending on the degree of confidence, the numbers could realign with investors becoming more risk-averse. It’s all “wait and see” going into 2024.

Elsewhere on Ventures

**Geographic Distribution: Key Countries and Regions**

The highest concentrations of foreign investment recently have been in South Africa, Egypt, Mozambique, Nigeria, and Ethiopia.

Title:

Content: AFED: EGYPT RECEIVED $5.1 BILLION INVESTMENTS IN 2021
GDP growth is expected to rise to 4.4% this year
Abdulrahman Abu Al-Enein
6: 52 AM, Wednesday, 31 May 23
Recent data issued by the African Development Bank (AfDB) revealed that Egypt ranked second in terms of foreign direct investment flows in the continent in 2021 and attracted nearly $5.1 billion.
According to the Africa Economies Outlook 2023, South Africa was the largest recipient of foreign direct investment in 2021 with investments of more than $40.9 billion, nearly half of the total inflows to the continent in that year, followed by Egypt and Mozambique, which each attracted nearly $5.1 billion, representing about 6.2% of the total volume.
In the same context, the report expected Egypt ’ s GDP growth rate to decline to 4.4% this year from 6.6% estimated last year, and to rise to 5.1% next year.
The report pointed out that the inflation rate rose from 4.5% in the fiscal year 2020 / 2021 to 8.5% in the fiscal year 2021 / 2022 due to the rise in food and energy prices globally and the devaluation of the pound against the dollar.
He said that the current account deficit shrank to 3.5% of GDP in the fiscal year 2021 / 2022 compared to 4.4% in the previous fiscal year 2020 / 2021 due to the rise of tourism revenues to 10.7 billion dollars against 4.9 billion dollars, respectively.
The African Development Bank pointed out that the banking sector remains profitable and well capitalized, noting that the rate of non-performing loans reached 3.2% in June 2022, explaining that subsidies and social protection programs have reduced the impact of high food and energy prices on vulnerable families.
The Minister of Planning Hala Al-Said said in previous statements that despite the current effects of the Russian-Ukrainian crisis, which is likely to spread over the next year, the Egyptian economy is expected to grow by 4.2% by the end of the current fiscal year 2023-2022.
Al-Saeed said that with the development of inflationary trends in the Egyptian economy and despite the success of the state in curbing it and reducing it from very high levels (25% in 2017-2016) to less than 5% in 2021-2020, the rate increased to about 15% in 2022, and continued to rise, especially after the Russian-Ukrainian crisis.
Foreign direct investment in Mozambique increased by 68% in 2021, the report said, noting that these investments were largely directed to green projects in the energy sector.
Nigeria accounted for 5.8% of FDI inflows to Africa and Ethiopia 5.1% despite economic challenges.
The bulk of foreign direct investment in these countries is increasingly going to clean energy resource projects.
Mauritius and South Africa recorded the largest outflows in 2021, but a few countries recorded net inflows, including Egypt ($18 billion) and Nigeria ($5.9 billion).
The Bank estimates that capital flight through net investment outflows continued in 2022 at around $28 billion, which is close to the 2021 level due to higher interest rates linked to deflationary monetary policies in developed countries.
Official development assistance (ODA) to Africa stabilized at $65 billion in 2021 after the previous 28 percent jump in 2020.
The significant increase in such assistance since 2020 reflected the support provided by the international community to help African governments address the humanitarian, social and economic impacts of the coronavirus epidemic and the difficult global economic conditions.
The African countries that saw the largest increase in ODA in 2021 included Egypt (428%), Equatorial Guinea (115%), Angola (109%), Gabon (82%) and Sudan (60%).
The report pointed out that official development assistance to Egypt during 2021 amounted to about 8.2 billion dollars, Ethiopia 4 billion dollars, Sudan 3.8 billion dollars, the Democratic Republic of the Congo 3.5 billion dollars, Nigeria 3.4 billion dollars, and Kenya 3.1 billion dollars.
African countries need to leverage this external support to address existing vulnerabilities and build more resilient economies, given the risks that advanced economies are reallocating resources for reconstruction and humanitarian assistance in Ukraine at the expense of meeting the continent ’ s official development assistance commitments.
Ukraine received $16.1 billion in net official development assistance (ODA), equivalent to 7.8 percent of the total aid resources provided last year.
It is noteworthy that the report was launched in light of the annual meetings of the African Development Bank Group held under the auspices of President Abdel Fattah El Sisi in Sharm El Sheikh from 22 to 26 May.

What trends are emerging for African startups in 2022?

Which African countries are driving the venture capital ecosystem?

Which countries are preferred FDI destinations in Africa?

South Africa led in 2021, attracting nearly $40.9 billion, affirming its position as a regional economic hub with diversified sectors appealing to investors .

Egypt and Mozambique each received approximately $5.1 billion, while Nigeria and Ethiopia captured 5.8% and 5.1% of Africa’s FDI inflows respectively .

Regional growth is primarily strong in South, East, and West Africa, while North Africa experienced a slight overall decline, tempered by Morocco’s 52% investment increase in 2021, notably catalyzed by a $20 billion wind energy export infrastructure project to the UK .

West Africa continues gaining prominence as a venture capital hotspot, with over 700 deals valued above $1 million between 2019-2023, led by Nigeria and Ghana’s burgeoning fintech hubs .

Title:

Content: East Africa’s evolving venture capital industry

Novastar invested in Kenyan tech-enabled forestry company Komaza in July 2020.

By Niraj Varia, partner at Novastar Ventures

When we set up Novastar seven years ago the concept of venture capital in East Africa was a slightly crazy idea. Impact investing was one thing but it took a long time to convince investors that it was possible to deliver impact and financial returns at an early stage. Today, that argument has been made and the market is undoubtedly maturing.

Two prevailing trends point to this growing maturity. First, we see specialisation amongst both investors and start-ups. Early on there was an attitude of “we don’t know if it’s going to work, let’s be open to anything and give it a go”; today firms are singular in their focus. A great example on the investor side is Mobility 54, a corporate VC backed by Toyota Tsusho Group, which invests solely in mobility solutions for Africa. In turn, Africa-based entrepreneurs have zeroed in on sophisticated solutions to endemic problems. In the past few months alone we have spent time with 10 electric vehicle companies, two companies using AI applied technologies, and a score of marketplaces working to disintermediate broken supply chains. Meanwhile, as we know, fintech is thriving. This level of entrepreneurial activity, and the growing sector expertise that sits behind it, is good news for the East African venture ecosystem and ambitious businesses across Kenya, Uganda and Ethiopia.

The second indicator of market maturity is an increasing separation between impact and venture funds. In the past, if you invested early stage you were probably an impact investor whereas now there are increasing numbers of investors, both individual and institutional, who believe you can invest early to make money. Similarly, there are investors trying to have impact by doing more than just investing in SMEs. The industry no longer lazily bundles ‘early stage’ as impact and venture.

African venture capital is emerging as a distinct asset class. Venture is a very different animal to private equity; our work is not about the deep analysis of a single company in a sector and its financials but rather a judgement of individuals and teams. Almost by definition anything that we get excited about has huge amount of potential and almost no track record. That demands a different way of thinking and a particular sort of investment team.

And there is something distinctive about venture in Africa compared to more developed markets. This is a set of countries where there is massive untapped opportunity in every sector, and challenges in every part of the value chain. The entrepreneurs we work with seek to boldly transform the continent in a fundamental way – to change the way pharma works or disrupt the fertiliser industry, to come up with a new model for agri procurement or introduce innovative sanitation models in overcrowded informal settlements. Through our investments, we show it is possible to be equally committed to the financials and the impact. In our geographies, commercial success and impact at scale are mutually reinforcing because the companies we back are fixing huge problems, not making incremental gains in established industries. This impact finds voice in the stories of customer – whether that’s a family in Kibera getting on to the internet for the first time, a newly married couple buying a sofa for their new home, or a schoolboy being able to access a safe, clean toilet on his way to school.

A couple of examples help demonstrate the opportunity we see every day. One is NewGlobe Education, which started in Kenya expanded into Uganda, and today operates in five countries with over 2,000 schools and more than 780,000 current active pupils. Novastar was one of the first investors in NewGlobe and we’ve since been joined by the Chan-Zuckerberg Initiative and US VC firm NEA, amongst others. A second example is Komaza, whose unique microforestry approach pays farmers to grow tiny plots of trees for wood. Komaza does three things: it generates commercial return, brings enormous social benefit to farmers and their families, and sets up a unique environmental impact story. Both NewGlobe and Komaza share tech enabled operating models and work directly with low income communities on extraordinarily thin margins. These are themes which unite the Novastar portfolio and capture our thesis that you can secure tremendous social impact as well as strong financial returns.

We are not fundraising at the moment, but during the past 12 months we have definitely seen a spike in inbound interest from places like the West Coast, Hong Kong, Singapore and Europe as firms seek co-investment opportunities. This confirms East and West Africa is slowly being recognised at a global level. In turn, the DFIs are increasingly setting up their own internal venture arms, for example British International Investment. Their comfort with the ‘risk’ of venture in Africa now feels secure.

In 2014, Novastar set out to catalyse a new asset class in East Africa. We bear the scars and have the learnt the lessons from the 22 investments we have made since then. Our strong networks have brought in co-investors behind us, both third parties and our own LPs. We remain utterly true to our mission: to back amazing businesses which serve the common good, make money and as a direct consequence transform entire sectors. But we cannot do it alone.

More and more companies are providing early stage funding, be they angels or venture funds, but securing series A and B funding in East Africa remains very tough. Finding an investor willing to write the US$8 million – $15 million cheques needed to support rapidly growing but still unprofitable businesses is hard work. The second challenge is debt, start-ups in East Africa have to raise a lot more capital than they should because they are financing growth – capex or inventory, using equity. In addition, all of our companies have to try and fix entire value chains as they scale; this makes them more capital intensive as they have to iterate more and build much more expertise in their teams. That is why the series A and B rounds are so crucial. We welcome new entrants to this market. The handful of exits that have taken place so far are a cause of unique celebration; over the next three years, there will be more, enough, we think, that they will become cause for routine celebration.”

This article was first published in the East Africa Private Equity Industry Survey, produced by EY and EAVCA.

What trends are emerging for African startups in 2022?

Which countries are preferred FDI destinations in Africa?

**Industry Focus: Emerging and Sustained Sectors**

FDI in Africa spans multiple sectors, with energy, extractive industries, technology, finance, agribusiness, infrastructure, and manufacturing leading.

Title:

Content: Centurion Law Group Navigates Legal, Regulatory And Tax Frameworks At African Energy Week (AEW) 2023

(MENAFN- African Press Organization)

A Technical Track hosted by pan-African legal and business advisory group, Centurion Law Group, held during the 2023 edition of African Energy Week (AEW) ( ) – taking place in Cape Town from 16-20 October – explored the legal, regulatory, and tax frameworks throughout Africa.

The technical track kicked off with opening remarks by Centurion Law Group Managing Director and Partner, Zion Adeoye, who moderated the session and spoke on Africa's position as one of the world's most attractive destinations for investment and how legal and regulatory frameworks are being put in place to advance local content development in the continent's energy sector.

“Africa remains one of the most attractive destinations for investment,” Adeoye stated, adding,“It is very clear that for the next two to three decades, oil and gas development will be very active. In Africa, local content manifests in several ways – shareholding in the company and utilizing local manpower. In the extractives industry, investors always have the problem of balancing the best hands to work on their projects and adhering to local content laws in terms of getting the right content barriers across the industry.”

Following the presentation, a panel featuring the participation of international legal representatives from Mauritius, South Africa, Equatorial Guinea, Guinea, Russia, South Sudan, Ghana, and Nigeria explored the regulatory and legal frameworks throughout the continent and abroad.

“In Mauritius, we allow investors to engage in transactions more easily in Africa,” stated Keseena Chengadu, Head of Investment at Centurion Law Group, adding,“It's good to use us as a hub when internationals want to invest in Africa. We offer assistance to internationals with engaging in transactions, which can be very challenging.”

“South Africa is comparatively significantly industrialized, and it results in a few advantages for potential investors,” stated Gari Matarirano, Energy and Infrastructure Attorney at Centurion Law Group, when speaking on the southern African country, adding,“First off, the reliability of professional service firms, the tax system, is quite sophisticated with a strong source of funding through the financial system.”

“In Ghana, we have a robust regulatory framework,” stated Yorm Ama Abledu, Senior International Attorney at Centurion Law Group, adding,“As lawyers, we are able to guide clients and allow them to speak with the right authorities to deal with so that they are compliant with the law.”

The speakers spoke on local content development laws in Africa, highlighting the benefits and challenges related to investing in the continent while adhering to specific laws that could require as much as between 25% and 40% local participation.

“The markets are not very saturated, but the population is constantly growing, so it's a nice place to invest. But the fear of an investor is that they have to give up an average localization percentage of 25%,” stated Alexey Khromov, Law Intern at Centurion Law Group, adding however that,“The Government should think in the best interest of the communities, but also think about how to make your country more attractive as an investment destination.”

“In South Sudan, the country has given opportunities for foreign investors in terms of employment, but our investment promotion and requirement laws required 80% national workers in any company engaging in the country,” stated Rachel Tanda, Attorney at Centurion Law Group.

Additionally, Tamara Jombai, Attorney at Centurion Law Group touched on the individual requirements for companies seeking to participate in African markets, stating that,“When you are coming into a country, you need to decide on the size of the company and the kind of project you will be doing, which will determine what you will do.”

Furthermore, it was noted during the panel discussion that African countries feature diverse and robust taxation agreements, with Mauritius boasting 46 double taxation agreements across the world, which serves to help entities do business throughout the continent while using Mauritius as a hub. Meanwhile, the determination of doing business in South Africa is made in accordance with common law principles, wherein a foreign company engaging in the southern African country is subject to codified rules for certain types of income such as dividends, royalties, and interest.

Speaking on South Sudan's tax regulations, Grace Yella, Director for the Economic and Monetary Community of Central Africa at Centurion Law Group stated that,“There is a wide range of options for investors to settle business in the East African region. Each country has particularities when it comes to tax. The similarity is they opt for each investor to have the possibility to have their own declaration – they choose what to pay as tax. The authorities then have to carry out investigations to confirm that what has been submitted correlates to your commitments.”

The panel closed off by noting that Africa is diverse in its legislation and regulatory requirements, highlighting that international investors seeking to do business in the continent are subject to a variety of frameworks. With a burgeoning energy sector and fast-growing population, the panelists noted that Africa's growing industries and economies will continue to serve as a promising investment destination for international firms.

Under a mandate to make energy poverty history by 2030, AEW 2023 kicks off its strategic program on 17 October, and will unite African energy policymakers and stakeholders with global investors to discuss and maximize opportunities within the continent's entire energy sector.

Distributed by APO Group on behalf of African Energy Week (AEW).
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The transition towards clean energy is prominent; commitments to energy and gas projects surged from $24 billion in 2021 to about $120 billion in 2022, reflecting global momentum for sustainable power .

Renewable energy initiatives doubled international projects in Africa from 36 in 2011 to 71 in recent years, including significant wind farms and solar developments .

Mineral-rich sectors maintain steady appeal, with cobalt, lithium, copper, and nickel essential for electric vehicles attracting sustained investor focus, particularly in the Democratic Republic of Congo, Zambia, and Zimbabwe .

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

The fintech sector is rapidly maturing, projected to rise to $30 billion revenues by 2025, and has spawned many African unicorns, underpinning Africa’s digital transformation trajectory .

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

Pharmaceuticals, agro-processing, and infrastructure development round out sectors gaining foreign capital, aligned with Africa’s industrial diversification goals .

What are the outcomes of increased agricultural investments in Africa?

Which sectors are Chinese investments in Africa focusing on?

**Major Investors and Representative Projects**

European countries dominate FDI sources, with the United Kingdom and France investing $65 billion and $60 billion respectively, primarily in oil, gas, mining, and finance sectors .

Which countries are actively investing in Africa besides China?

American companies, including those participating in Prosper Africa, alongside Chinese firms investing heavily in infrastructure, remain crucial players, albeit facing scrutiny over construction quality on some projects .

Title:

Content: Part I: Attracting Foreign Investment into Africa may not come from the Sweet Stories we tell Foreigners

2
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By Edward Chisanga

I attended an Investment Forum in Utopia last week where Utopian countries had a rare opportunity to speak their minds out to foreigners who had attended in large numbers together with their Heads of State. The Master of ceremony began by introducing the private sector from rich countries present from France, UK, USA, Germany, Netherlands, and others from the EU membership before turning to the Utopian Heads of State and their groups.

What Foreign Investors Heard

Then he called upon one Utopian Head of State to speak on behalf of all the fifty-five African countries in attendance to list compelling factors that would captivate foreign investors from rich countries to go and invest in Africa.

The President began, “Africa is a huge piece of land, most of which is underutilized. All the countries that I represent here boast of huge land available for you investors. Come and invest in Africa, the continent of the future.” Then the President turned to one of the Presidents in his group and allowed him to speak about his country’s promotion of investment.

“Zambia has one of the most open trade environments in Africa and is a member of the Southern Africa Development Community (SADC) and the Common Markets for Eastern and Southern Africa (COMESA). Businesses in Zambia benefit from one of the lowest profit taxes in the region. Increasing regional cooperation through multilateral organisations, including SADC and the African Union should continue to reduce the likelihood of interstate conflict.” Then he highlighted ‘Some of the government incentives to FDI as:

  1. Dividends paid out on farming profits are exempt for the first five years of activity.
  2. Initial allowance of 10% on capital expenditure incurred on the construction or improvement of an industrial building is deductible.
  3. Foreign exchange losses of a capital nature incurred on borrowings used for the building and construction of an industrial or commercial building are tax deductible.
  4. Income earned by companies in the first year of listing on the Lusaka stock exchange qualifies for a 2% discount on the applicable company tax rate in the particular sector. However, companies with more than 1/3 of their shareholding in the hands of Zambians qualify for a 7% discount.
  5. Implements, machinery and plant used for farming, manufacturing or tourism qualify for wear and tear allowance of 50% of the cost per year in the first two years of activity.

He continued, “Investors who invest at least USD250,000 in any sector or product not provided for as a priority sector or product, is entitled to non-fiscal incentives such as investment guarantees and protection against state nationalization and protection against non-commercial risks (Zambia is a signatory of Multilateral Investment Guarantee Agency).”

Then the moderating African President turned to South Africa’s President and gave him the floor. President Cyril Ramaphosa was quick and went straight to the point by referring his audience to his weekly newsletter output, ‘From the Desk of the President,’ and repeated the points he recently made in the United Kingdom, “Government has a bold vision to be a destination of choice for foreign direct investment and this requires far-reaching reforms. These include reducing the cost of doing business for both large and small businesses, improving the quality of South Africa’s institutions, enhancing administrative efficiency and governance systems.”

When the turn of the Ethiopian Prime Minister came, he repeated what he had said at the 2019 Davos Meeting in Switzerland, “Investment in infrastructure has contributed a lot to the growth and attracted FDI, making Ethiopia one of the leading FDI destinations in Africa.”

Based on what the three African countries presented as their selling points to attract FDI, the President speaking on behalf of Africa retorted, “The three African countries that have just spoken present a strong representative basis for me to conclude that Africa is ripe and ready for FDI. “You have heard yourselves from the horses’ mouths,” He proudly said. “There’re similar incentives in Rwanda, Benin, Lesotho, Burkina Faso and all other countries. It’s time for you to come and invest in Africa.”

What Foreign Investors do not hear.

Despite the repeated sweet stories coming from African leaders, there’re equally important things that Foreign Investor don’t hear but that they are aware of.
About Zambia, an UNCTAD Investment Report reports, “Zambia’s infrastructure, whose poor quality is a barrier to investment, should be strengthened by investments in the road network, railways and the construction of power plants. In 2021, a USD 11 billion standard gauge railway project was announced in Zambia, involving US capital, which would expand essential transport links with the outside world. The regulatory environment does not favour entrepreneurial activity, the requirements for commercial licenses being long and costly, and the application of regulations not being uniform. In addition, the protection of property rights and the enforcement of contracts are still weak by international standards.”

As the author of this article is a Zambian living in Zambia, he is aware of the challenges coming the country’s energy sector. We have loadshedding in Zambia which Foreign Investors are aware of. They’re aware that the Mining sector, the country’s brain earner depends on use of energy, yet it is not exempted from malady of shortages. Equally, they know how much Zambia’s private sector suffers from energy shortage and its effect on business.

In South Africa, despite sweet stories, except only in 2021inward FDI flows have been declining significantly since 2010 as Figure 1 below shows. Even if this dwindling trend were to be attributed to other factors, the deteriorating energy situation in South Africa is playing a multiplier effect on FDI and the overall economy. Yet, South Africa like other African countries’ Heads of State turn a blind eye on the matter. As for many other things going unwell, they simply don’t tell the truth about the energy crisis.

In Ethiopia, Laments Omer Redi, “The crisis in the power supply has reached such a critical point that blackouts now occur every other day.” Fortune adds, “It is obvious that Ethiopia is now in such a serious power crisis that it has been forced to introduce load shedding.” There are other voices no longer silent. Said Kevin Daly of London based investment company, “Ethiopia is uninventable now. The political situation is very tenuous, and there is a lack of information and clarity on the economy, and on how things are going to be resolved.”

Concluding

Policy coherence is defined by the OECD as, “The systematic promotion of mutually reinforcing policy actions across government departments and agencies creating synergies towards achieving the agreed objectives.” The wonderful incentive packages must be complemented with other key inputs to build a whole.

For example, just as a motor vehicle cannot move smoothly if one key part falls off, you cannot attract adequate FDI with a list of incentives only when the energy sector, upon which industry depends is in crisis. Fix energy, infrastructure, human skills, corruption, rule of law, security, etc to arrive at a complete package of what attracts FDI. FDI goes to Asia because there’s no infrastructure, human capital, or energy crisis.

All these are well built. Asia also has bigger land than Africa. We cannot keep on using obsolete factors that are abandoned by others to attract FDI. It’s like always saying, “Come to Zambia and see the Victoria Falls.” Foreign Tourists now go to beautiful cities without dust, simply to visit, feel safe and talk to honest and humble citizens with Asians largely qualifying in almost all these. Our cities, including Livingstone, are not ripe for serious tourism that builds wealth.

Foreign Investors or tourists are not our uncles on whose shoulders we will simply cry and await their positive response. They will not come simply because we are democratic and shout that Zambia is ready for business. They are not cajoled by sympathy or simply because Zambia’s leadership change occurs smoothly. They have not come since change from Kaunda to Chiluba or Chiluba to Banda or Banda to Sata which were all peaceful and democratic. We must understand what their needs are. If we don’t provide, they’ll go to Asia.

Which countries are actively investing in Africa besides China?

Japanese and South Korean conglomerates such as Toyota, Nissan, Samsung, and Hyundai have expanded automotive manufacturing and technology services across Africa .

Which countries are actively investing in Africa besides China?

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

Which sectors received the most foreign investment?

Noteworthy projects include BP’s LNG developments in Senegal and Mozambique, Shell’s explorations in Namibia, and Perenco’s LPG facility expansion in Gabon and Congo .

Title:

Content: Global investment in upstream oil and gas is set to reach $570 billion in 2024, showing a 7% rise compared to 2023 expenditure. Of this, 33% is expected to be directed towards frontier fields, presenting a strategic opportunity for undeveloped oil and gas markets in Africa. With lack of investment representing one of the biggest challenges to project development across the continent, the African Energy Chamber (AEC) (www.EnergyChamber.org) will host a networking reception on July 11 in London – Europe’s financial capital. Taking place at the Four Seasons Hotel London at Park Lane from 17:00 to 21:00, the reception bridges the gap between European financiers and African energy projects, promoting synergies, deals and future collaborations.

Despite holding some of the largest untapped oil and gas resources worldwide, Africa is faced with an energy crisis, with 600 million people currently living without access to electricity and 900 million people without access to clean cooking solutions. The African Development Bank estimates that to address this crisis, the continent requires between $40 billion and $70 billion in annual investment. Presently, Africa receives on average $35 billion in global financing for fossil fuels and clean energy projects, with merely 5% of global energy investment directed towards the continent. This showcases a clear investment gap and a strategic opportunity for European funders and project developers.

With over 125 billion barrels of proven crude oil, 620 trillion cubic feet of natural gas and abundant opportunities in solar, wind and geothermal, Africa continues to attract investment from some of the world’s biggest players. The continent’s greenfield upstream spending, for example, is projected to reach $37 billion by 2025 and $50 billion by 2050, with companies eager to unlock the full potential of undeveloped oil and gas. Specifically, a strong slate of London-based oil and gas firms are driving a wave of project developments across the continent.

These include energy major bp, who is developing Senegal and Mauritania’s inaugural LNG project – the Greater Tortue Ahmeyim (GTA) facility – and Mozambique’s Coral Sul FLNG project. GTA is on track for first production in 2024 while bp delivered first gas from Coral Sul in 2022, marking the first LNG cargo for the country. Additionally, energy major Shell is making strides towards opening up the Orange Basin in Namibia. The company’s Graff-1 discovery in 2022 was play-opening and Shell has made an additional five discoveries since then. The company is investing 25% of its deepwater exploration budget in the country this year.

Additionally, independent hydrocarbon producer Perenco inaugurated the $50 million Batanga LPG plant in 2023 and is developing the $1 billion Cap Lopez LNG terminal in Gabon. The company is also investing in shallow-water and marginal assets across the continent, acquiring Eni’s core assets in the Republic of the Congo in June 2023 for $300 million. Oil and gas company Tullow Oil anticipated commercial oil production in Kenya in 2028 while transitional energy company Chariot oil and gas recently signed a gas commercialization agreement with Vivo Energy in Morocco. These developments – all led by London-based companies – represent just some of the many underway across the continent.

The AEC Reception builds on these deals to promote new investment in African energy. Taking place in London – both Europe’s financial capital and its biggest stock market – the reception is all about connecting companies to opportunities. The total value of companies listed on the London Stock Market reached $2.18 trillion in June 2024, highlighting a commercial and strategic opportunity for the reception and African energy projects.

The AEC London Reception takes place ahead of the continent’s largest energy event, the African Energy Week (AEW): Invest in African Energy conference, scheduled for November 4-8 in Cape Town. Under a mandate to make energy poverty history by 2030, the event unites global investors and technology providers with African energy projects, with discussions tailored around unlocking high returns and generating mutually beneficial opportunities. Participants at the AEC’s London Reception have the chance to gain exclusive insight into AEW: Invest in African Energy 2024 while engaging with a suite of African stakeholders.

This year’s AEW: Invest in African Energy will host the African Energy Finance Summit – a platform that galvanizes financial support for African energy projects, while promoting deal-signing and partnerships. Hosted in partnership with multilateral financial institution the African Export-Import Bank and global market intelligence firm S&P Global Commodity Insights, the summit brings capital to Africa with the aim of making energy poverty history by 2030.

Don’t miss the chance to be at the forefront of Africa’s energy transformation. Register for the AEC’s London Reception at https://apo-opa.co/3KUx0qt or contact register@aecweek.com.

AEW: Invest in African Energy is the platform of choice for project operators, financiers, technology providers and government, and has emerged as the official place to sign deals in African energy. Visit www.AECWeek.com for more information about this exciting event.

Distributed by APO Group on behalf of African Energy Chamber.

The $20 billion wind power export project from Morocco to the UK exemplifies large-scale renewable investments facilitating global energy transition linkages .

**Recent Partnerships and Collaborative Ventures**

Strategic collaborations between African entities and foreign investors have increased, highlighting equity partnerships, joint ventures, and co-development initiatives.

What trends are emerging for African startups in 2022?

Which countries are actively investing in Africa besides China?

In Angola, French agribusinesses such as CFCAI Group and COOPEX enhance dairy and feed production through partnerships supported by governmental facilitation [11].

Title:

Content: Angola: French Businesspeople Want to Expand Agricultural Companies in Angola

Luanda — A group of three French businesspeople Wednesday, in Luanda, expressed interest in extending their investments and increasing the number of companies operating in the farming industry in the country, aiming to support the process of increasing food production in Angola.

These are investors from CFCAI Group, a multinational company specialising in drying grains, COOPEX which is specialising in cattle genetics and IDENA, one of the biggest companies producing animal feed and supplements, who unanimously considered Angola to be a good country to invest, given its potential and the favourable business environment.

The mentioned businesspeople, who are in the country as part of an announced visit to Angola by French Presiden Emmanuel Macron, expressed their intention, this Thursday, during a meeting in Luanda with the secretary of State for Agriculture and Livestock, João Bartolomeu da Cunha.

Speaking to the press, the director general of COOPEX, Tristan Gaiffe, informed that his company plans to develop a project to breed "Montbéliarde" cattle in Angola, in order to boost the manufacturing process and transformation of milk in the country.

According to the manager, for the first phase of implementation of this project, the company plans to bring 165 heads of cattle to the country this year to test their adaptation in Angola, adding that the Montbéliarde breed has a good capacity to adapt to the climatic conditions of many African countries, with potential in milk production.

The commercial director for Africa of IDENA, Damien Beacco, is another person who has shown interest in boosting investment in Angola, being that his company already operates in Angola in the monogastric sector.

He said the meeting held with the Ministry of Agriculture and Forestry was satisfactory, as it provided information about Angola´s potential and business opportunities in the farming sector.

Regarding the French President's visit to the country, the businessman said that it would serve to boost the presence of more companies in Angola and vice-versa.

The secretary of State for Agriculture and Livestock, João Bartolomeu da Cunha, said that the audience granted to the French businesspeople served to exchange ideas related to agricultural and agribusiness production in the country.

He noted that materialisation of the intentions shown by the businesspeople would bring enormous benefits, mainly in terms of obtaining knowledge and cutting-edge technology for agriculture and farming, as well as increasing production of foodstuffs that the country still produces in small quantities.

He added that another advantage would also be to increase storage capacity for products and give greater quality to cereals, which would considerably reduce losses after harvest.

For that purpose, he appealed to entrepreneurs to set up their industrial units in Angola, for local transformation of the raw materials that the country has.

In addition to the investment plans of those businesspeople, 60 French companies are already operating in Angola, in several social and economic sectors of the country, which has made it possible to create over 10,000 jobs, according to the French-Angolan Business Club (CEFA).

Bilateral cooperation between Angola and France dates back to 1982 and this is the fourth time that a French President visits Angola. The last visit of a French statesman to Angola happened in July 2015, by the former President François Hollande.

Meanwhile, the Angolan Head of State, João Lourenço, visited France in May 2018.

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What are the outcomes of increased agricultural investments in Africa?

Which European countries lead investment in Africa?

Which countries are actively investing in Africa besides China?

Which sectors received the most foreign investment?

East and West African tech startups like Kenya’s Komaza and NewGlobe Education have attracted venture capital from funds including Novastar Ventures and British International Investment, evidencing investor confidence in scalable, impact-driven businesses [6].

What trends are emerging for African startups in 2022?

Which African countries are driving the venture capital ecosystem?

Which European countries lead investment in Africa?

Regulatory measures in Mauritius, South Africa, Ghana, and South Sudan mandating local participation (25-40%) encourage inclusive growth while protecting investment returns .

International platforms such as the Taiwan-Africa Entrepreneurs Association and the African Energy Week foster networks cultivating cross-continental commerce and innovation [3].

**Career Opportunities for Business Graduates**

The expanding foreign investment ecosystem in Africa offers diverse career avenues for business administration graduates.

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Content: South Africa supports calls for global co-operation to boost trade and address economic challenges and climate change

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Johannesburg, South Africa – 23 January 2023: The 53rd Annual Meeting of the World Economic Forum (WEF) in Davos, Switzerland, concluded on Friday, 20 January 2023. World leaders and corporate executives expressed hope that the looming recession facing the global economy could be avoided if countries collaborated to boost global trade and investment.

A high-level South African government and business delegation has returned home from the meeting more upbeat than before that the current economic slowdown and rising inflation could be resolved if nations addressed global supply disruptions that are leading to commodity shortages and driving up energy and food prices.

The delegation was led by Minister of Finance, Enoch Godongwana, who was accompanied by leaders of South Africa’s major corporations operating in various sectors of the economy. The delegation also included Minister of Trade, Industry and Competition, Ebrahim Patel; Minister of International Relations and Cooperation, Naledi Pandor; and Minister of Human Settlements, Mmamoloko Kubayi.

This year’s WEF Annual Meeting was held under the theme “Cooperation in a Fragmented World” and covered many interconnected topics including the impact of the ongoing Russia-Ukraine war on the commodity markets, skyrocketing cost of living caused by rising inflation and monetary policy tightening by central banks, climate change, and the growing impact of artificial intelligence (AI) on workplaces and labour markets.

“The South African delegation did a fantastic job in Davos where it sold our country to global investors as a favourable market to do business and invest in. Notwithstanding the energy supply constraints that our country is currently grappling with, South Africa remains an attractive investment destination given its excellent infrastructure, sophisticated financial markets, and a skilled workforce,” says Sithembile Ntombela, Acting CEO of Brand South Africa.

The South African government is currently implementing structural reforms that have opened the energy sector to private investment to boost energy generation and bring an end to load-shedding that is constraining the economy.

“The structural reforms that are currently being implemented by the government are making progress in removing investment bottlenecks and reducing the cost of doing business. These reforms will enable South Africa, a preferred destination by local investors and global multinationals looking to expand across Africa, to take advantage of the opportunities presented by the African Continental Free Trade Area (AfCFTA),” says Ntombela.

The AfCFTA, which officially launched in 2021, will create the world’s largest free trade area, stimulate intra-African trade, develop regional value chains, and promote industrialisation across the continent.

The AfCFTA Secretariat and WEF revealed in a report unveiled at this year’s Davos meeting that AfCFTA is projected to create single market that will grow to 1.7 billion people and $6.7 trillion in consumer and business spending by 2030.

By 2050, the continent is estimated to be home to 2.5 billion people and a market with a combined business and consumer spending of $16.12 trillion.

The report titled “A New Era for Global Business and Investment in Africa” lists four high-potential sectors that hold lucrative opportunities for companies looking to invest in Africa.

These sectors are automotive, agriculture and agro-processing, pharmaceuticals, and transport and logistics, which are all expected to see rapid growth in terms of production and trade volumes under AfCFTA.

“Given that South Africa is the most industrialised and sophisticated economy in Africa, it is well positioned to take advantage of opportunities presented by AfCFTA. The development of the free trade area will require massive investment in logistics and telecommunications infrastructure to reduce the cost of doing business and enable free movement of people, goods and services,” explains Ntombela.

With the green energy transition and digital transition in full motion around the world, the delegation that represented South Africa at WEF2023 expressed support for calls to reskill and upskill workforces, particularly the youth, to prepare them for future workplaces and to mitigate job losses.

The delegation is impressed by the progress made by the WEF’s Reskilling Revolution; an initiative launched in 2020 to empower 1 billion people. So far, the initiative has reached 350 million people.

Climate change also took centre stage at WEF with world leaders and business executives committing themselves to supporting the implementation of the Paris Agreement, which calls on all countries to cut carbon emissions to limit global warming to around 1.5 degrees celsius and strive towards attaining net zero emissions by 2050.

This commitment requires countries and businesses to move away from using fossil fuel energy sources like coal and crude oil and adopting clean and environmentally friendly energy sources such as wind and solar power.

The launch of the new Coalition of Trade Ministers on Climate, which brings together over 50 countries, was also a highlight of this year’s  WEF annual meeting.

The coalition aims to tackle climate change by promoting trade and investment that encourages adoption of goods, services, and technologies that mitigate climate change in both developed and developing countries.

“However, the global challenges that were highlighted at WEF 2023 cannot be resolved in a fragmented world in which countries are pulling in different directions. These challenges require collaboration and unity by the nations of the world, where counties are working together to find solutions in an integrated global economy,” concludes Ntombela.

Ends/////

Issued by Brand South Africa

Notes to the Editor

Contact: Phindi Mathebula

Email:phindilem@brandsouthafrica.com

Mobile number: +27 64 890 7414

About Brand South Africa

Brand South Africa is the official marketing agency of South Africa, with a mandate to build the country’s brand reputation, to improve its global competitiveness. Its aim is also to build pride and patriotism among South Africans, to contribute to social cohesion and nation brand ambassadorship.

This electronic communication and the attached file(s) are subject to a disclaimer which can be viewed at https://www.brandsouthafrica.com/terms-and-conditions . If you are unable to view the disclaimer, please email info@brandsouthafrica.com for a copy.

What trends are emerging for African startups in 2022?

Demand is strong for professionals skilled in project management, financial analysis, investment banking, and compliance within energy and infrastructure development projects .

The burgeoning tech sector creates opportunities in venture capital management, startup business development, digital marketing, and data analytics, particularly within fintech innovation hubs .

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.

SEE ALSO:

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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In this fifth episode of Senegal at the Heart, Senegalese President Macky Sall discusses his university and career path in his memoirs, describing himself as a "patient human being" and a believer in the principle of "kum se bobe" in the Luvian language, meaning "self-confidence", noting that he did not plan to get into any political office.
Upon his appointment as general manager of PETROSIN (the Senegalese Petroleum Company) and then minister of energy, President Sall stopped to express his happiness at being the president in whose term the important discovery of resources that constitute energy sources was made in 2015.
This is also an overwhelming pleasure for a geologist like him.
The following is the text of the fifth episode of the memoirs published by "Elaf":
I have learned a lot about the mineral riches and treasures of the earth since the second grade.
At the time, it was the talk of projects aimed at making the eastern part of Senegal a field for the exploitation of these natural resources, of iron and gold minerals, that got me interested in earth science.
I could have sought to study the atom, or become a chemist, but my culture was strongly influenced by rural life.
My roots were deep in the earth.
After the 1973 Ramadan War between Israel and some Arab countries, the price of oil increased fourfold (1973 – 1974).
At that time, the world realized how much people ’ s lives were connected to oil, and how crucial it was.
This situation has shaken the world in all the foundations of life.
In those circumstances, I was asking myself another question about my future.
That ’ s because unemployment was so high on people ’ s minds.
The state recognized the importance of training energy engineers.
In response to this need, the Institute of Earth Sciences was established.
Joining the Institute of Earth Sciences
I did not hesitate much, I went and went to the University of Dakar.
The people in charge of this institute organized an exam to join it, and I thought I should try my luck.
So I took the exam and I passed, and I went to the Institute of Earth Sciences to study there in five years.
After an advanced stage of study, each student had to specialize in a division.
I chose the Geotechnical Division based on the study of the behavior of the Earth, and I became interested in hydrogeology, and then continued to get an in-depth certificate, but I was unable to do this study because I did not get a topic to research in time.
I had passed my preliminary exams, but then I worked as an intern at Petrosyn, before I was hired as an engineer, and shortly after, she sent me to Paris to specialize.
When I was a student in France, I continued my political struggle.
This political business has caused me some trouble.
It is because of my youth enthusiasm in the field of politics that resonates with the knowledge of the Senegalese authorities.
As one of Petrosen ’ s young executives, I had to be discreet or work behind the scenes, but even though I was quiet, I couldn ’ t hide my conviction.
Some officials did not accept the public political work of the opposition from a young elite sent to France by a public company.
A phone call ordering my dismissal.
One day, the general manager of Petrosen, Mr. Osman Ngai, received a call from the highest authorities of the state, asking him to dismiss me from my studies and return me to my country as soon as possible.
But Mr. Ngai refused to carry out this request.
Upon my return from France in 1993, I was appointed by this manager to be in charge of the company ’ s data bank.
This was one of the highest positions at the time.
Mr. Ngai appointed me himself to this post, and he was not one of those who succumbed to the politicians.
He is a good friend of mine and I respect him very much.
Maneuvers.
From 1993 to 2000, she worked as an employee at PetroSin.
In December 2000, I was appointed General Manager of the company.
I did not enter the government immediately after the victory of Abdoulaye Wade in the presidential elections, but this was procrastinated, but I was about to get a promotion by appointing me director of the chemical industries in Senegal (ICS) and then I was told: “You have to start as first deputy, and then you become the director immediately. ” Then I said to President Wade,“ I am at your beck, ready to work in whatever job you see my country needs me for, and I don ’ t ask for anything. ”
After that, the position of first deputy director general of the chemical industries in Senegal was abolished, and so I was dismissed.
I understand very well these manoeuvres to keep me away, because starting in 1998, my name was appearing a lot in the press, and some thought that I was starting to get too important.
It doesn't matter. Things were working out for me.
I am a patient person and I believe in the principle of (how many times) the Wolof language, which means "self-confidence."
Besides, I didn ’ t plan to get into any political career.
Minister Petrosyn.
I stayed six months as general manager of Petrosen, before being appointed energy minister, until some even called me “Petrosen minister. ”
Before this appointment, Sayyid Abdullah Wad called me and said to me, “I want to appoint you as Minister of Energy. ”
I entered the government as Minister of Energy, Mines and Water after the 2001 legislative elections.
In this ministry, I was in my field of specialization, so I had no difficulty, professionally, but the position of minister involved me in the governmental field, which required other mechanisms.
President Wade quickly added to me other ministerial powers: the Ministry of Transport and Construction, after the sinking of the Jolla steamer.
This tragic accident resulted in the death of 1,683 passengers on a ferry carrying no more than 550 people.
Petrosen ’ s headquarters in Dakar as seen on its website
A position that doesn't suit me.
In November 2002, after the appointment of Mr. Idrissa Seck as First Minister, he proposed to me that I be appointed Director of the Cabinet of President Abdoulaye Wade.
This position did not suit me, and I preferred to stay in my ministry, and then I asked to get rid of the facilities and transport, and became the minister of state for energy, minerals and water, and I was the second in the protocol arrangement of the government.
To be an engineer and a geologist, that requires practical specifications.
First of all, thinking comes from observation.
This functional trait helps to recognize the relativity of things, and not to melt into current events.
The exercise of power also requires the ability to withstand the blows of opponents, not to react in the moment, and to think in the long run.
The setting of dates, as you know, is also at the heart of geological work, which is very important.
If a person finds himself in front of an event that can leave fingerprints and marks in his life, he must isolate the event, mark it under it and analyze it.
Thus, I always try to set a date for each event, so that this date indicates the nature and specificity of the work.
Determining the date of things means adjusting their rhythm in time and space.
My career and my specialization always overlap with my political career.
I am very happy to be the president in whose term the important discovery of energy resources was made in 2015.
This is also an overwhelming pleasure for a geologist like me.
Discovering the future wife
Exploration for these materials has been underway in Senegal for decades.
As part of my work at PetroSin, I participated in these efforts with exploration crews.
My first inspection trip was to the province of Jerbil in 1991.
During this excavation, I found neither gas nor oil, but a precious treasure, because on this journey, I met my future wife.
I was on a excavation mission in this region where she lived with her brothers.
She was in the third grade complementary in the electronic field.
One of my friends was her teacher, and when I came to visit him, I got to know Mary.
Maryam Val Sal (photo from her Twitter account)
I go back to the energy to say that Senegal had already discovered a small amount of gas in its soil.
In 2015, an important energy reserve was discovered in the Senegalese – Mauritanian border, known as Grand Tortue Ahmeyin or GTA, which turned all expectations upside down.
This inventory is estimated at 450 billion cubic meters.
What an extraordinary luck!
In addition to this stock, there are two wells drilled in the stone block at Kayar, as well as the stone block at Centelweis, one known as the "well of Yaklo" (please) and the other as the "well of Tranke" (karam).
These two wells offer us great potential to develop this sector, not to mention the stocks already mentioned in the Senegalese – Mauritanian border.
The wells in the south of Dakar are estimated to have between 100,000 and 150,000 barrels of oil per day.
Avoiding Dutch Syndrome
These discoveries will lead to a boom in Senegal, which will become one of the largest producers of oil and gas.
Production is scheduled to begin in 2021.
Former Mauritanian President Mohamed Ould Abdel Aziz and I signed an agreement between our two countries to unify and share production.
At the same time, we have worked to create a special law on hydrocarbons management, allocating a variety of financial resources to avoid falling into the Dutch syndrome of not sacrificing everything for black gold, and not neglecting other traditional sectors for the benefit of this important financial source.
This law formed a broad national consensus among politicians, administrators and civil society in Senegal.
Absolute transparency in how we use our wealth is the most important thing I want to leave to those who come after me.
Since 2013, Senegal has been a member of the Extractive Industries Transparency Initiative (ITTIE).
This initiative requires us to declare all the financial resources and amounts obtained in the field of oil exploitation.
As part of this initiative, independent bodies carry out comprehensive audits and have access to the accounts of different sectors of the state.
We were mentioned in Oslo among the most honest countries in the field of transparency.
It is very important not to repeat the mistakes that a number of countries in the world have made.
A large oil tanker docked at the port of Dakar
Energy Self-Sufficiency Betting
The Institute of Petroleum and Gas was established for the purpose of training specialists in this field, such as engineers, financiers and jurists together.
It ’ s also important to have our own law firm.
It is also important that our administrative bodies master how to deal with the technical sector, as well as with the collection of taxes resulting from petroleum transactions.
The biggest bet is the arrival of Senegal to self-sufficiency in the field of energy.
We will not accept any less.
If the expected 150,000 barrels per day were to be achieved, Senegal would no longer need to import oil from abroad.
The amount of oil we now consume is between 35,000 and 40,000 barrels per day, but that doesn ’ t mean that the problem will be solved once Senegal produces 150,000 barrels per day, because we should not forget that this product will be shared in certain proportions with others.
Oil extraction and refining require huge investments.
To get to the next stage of developing our energy situation, we need to invest five billion dollars.
Senegal ’ s entry into the club of oil-producing nations will be an amazing development, and our country ’ s image will be positively affected by this new situation.
Winning the Big Treasure
The perception of any country differs by the mere fact that this country is an oil exporter.
Our country is now like a man who has suddenly won the greatest treasure, with the big difference that we know where that treasure is and that we have to extract it ourselves.
We really need to avoid what many countries have done.
For example, when it comes to oil production, we expect that all problems have been solved, that everyone is no longer active, that everyone wants to receive double their previous salary, or buy a football club by European standards, or buy Mercedes for everyone.
All these considerations are pitfalls and slippages that we should avoid falling into.
Senegalese President Macky Sall and his wife Mariam
Dividend of Petroleum Revenues
The financial returns from oil and gas should simply allow us to diversify our economies and make larger investments in vital areas such as agriculture, education, health and industry.
More specifically, these financial resources should allow us to improve services, technology, and vital knowledge.
and so on.
This is the first time that an African country has given serious thought to how to divide the financial revenues from oil before it actually produces it.
I want to make the management of this financial resource completely transparent, in order to make the best use of it for the benefit of the Senegalese of present and future generations.
This law includes in its essence the local aspect of the involvement of Senegalese in all oil and gas ecosystems, especially in activities related to the production and trade of petroleum, logistics and other services.
I am fighting another battle aimed at developing the legal system for petroleum.
Africa should seek to review petroleum legislation that is not in its interest.
The riches that exist under African soil should benefit Africans themselves to develop their countries and bring prosperity and happiness to their people.
Carrying out such a fight to defend our interests, while respecting the rights of our partners, of course, should be an area for sustained transparency efforts.
The most important thing is the ability to track the financial returns from oil, gas and minerals.
Transparency Initiative Quality Certificate
Thanks to our efforts and actions, Senegal became the first African country to receive the Transparency Initiative Quality Certification.
She endorsed our transparency development efforts.
All of our contracts have been posted on a public record on the government website.
All financial imports received by the state can be tracked and published each year by independent offices.
All shareholders of our client companies have been publicly disclosed.
The financial returns are received from the state on the basis of known mechanisms, and the dues are divided and distributed on the basis of them.
A portion of these revenues will be allocated to future generations, and another portion to the general budget of the state.
In terms of the budget, it is necessary to distinguish what is invested in projects related to the preparation of the future.
For example, if we build the highway, generations will benefit from it from now until twenty or thirty years.
The same applies to the construction of universities, hospitals, cultural centres and high-tech scientific laboratories.
There has to be a way of managing that ensures these fortunes are secured when extreme difficulties occur.
All of these things were conceived and controlled.
We don ’ t want to bet everything on gas and oil.
We chose to diversify the sources of electricity access through mixed-source energy.
In this context, we have focused some efforts on solar energy, as it is not reasonable not to resort to the use of solar energy, with more than 300 sunny days per year.
By 2020, solar energy should cover 25 percent of our energy tools.
If we reach 30% of the solar energy...
We stop.
We have a wind corridor between Dakar and St. Louis, which can represent 150 megawatts, and eventually we will reach 80 percent of the clean energy.
Innovation will allow us to store solar energy starting at 7pm.
So we can find four hours of extra light stretching to 11: 00 p.m.
It's not a simple thing.
A good outlook for gas will lead to an increase in supply and hence lower prices due to competition.
I have been asked a lot of times, as an engineer and president of the republic, this question is: Do you think that you can build a nuclear power generator?
The answer to this question is that nuclear power is not a simple thing, and it cannot be treated lightly.
There must be an appropriate scientific climate with all safety and security standards.
It is also necessary to think about the management of waste with regressive radiation over a long period of time.
Africa and the coastal states do not need such a thing to illuminate any part of the continent.
The African continent has what it needs to produce accessible and competitive energy through our generous sun, our streams of water, our gas, our petroleum, our coal and our geothermal energy.

The prevalence of mergers and acquisitions highlights roles for specialists in negotiation, corporate governance, and international business law .

Graduates with cross-cultural competencies, proficiency in investment appraisal, and agility in navigating multinational partnerships will be especially sought after.

The African Continental Free Trade Area (AfCFTA) is poised to further expand intra-Africa trade and regional value chains, enhancing market integration and investment flow .

Complemented by government incentives such as tax breaks and profit tax reductions, this macroeconomic framework favors business professionals with international business acumen and strategic management skills .

Challenges persist, including infrastructural deficits and energy shortages, but these gaps foster demand for innovative solutions and experienced investment professionals to lead Africa’s ongoing economic transformation.

Title:

Content:
African economies should seize the opportunity to better integrate into technology-intensive global supply chains and boost prosperity, but this depends on their ability to harness key market and investment trends, the UN’s trade and development body UNCTAD said on Wednesday.

In a new reportUNCTAD shows that Africa can become a major exporter of higher value-added goods, creating growth and jobs, and fuelling a rise in productivity and wages.

Launching the report in Nairobi, UNCTAD Secretary-General Rebeca Grynspan insisted it would offer a better future for the continent’s economies.

Diversifying trade “builds resilience and enhances innovation”, Ms. Grynspan said, adding that diversifaction was “key” for private sector development and employment opportunities for Africa’s growing population.

Africa’s competitive advantage

Ms. Grynspan highlighted three factors driving the “huge” opportunity for the continent. From a geopolitical point of view, countries and businesses are seeking to diversify their suppliers and thus reduce risk. Africa is well placed to tap into this trend, Ms. Grynspan said, which together with the African Continental Free Trade Area offers “great synergies” for participating in global supply chains.

Africa also has a unique advantage amid the rise of the renewable energy market, as it is a vital source of raw materials for technology-intensive industries – for instance lithium, essential to the production of electric car batteries. It has the possibility to become a destination for manufacturing and should seek to export more complex finished goods rather than just commodities, Ms. Grynspan said.

As for demographics, Africa boasts not only a dynamic, young workforce, but also a “burgeoning” middle class offering local consumer markets for hi-tech goods.

‘Untapped potential’

The report analyses “untapped potential” for African countries to strengthen their position in the automobile, solar energy and pharmaceutical industries.

Encouragingly, Ms. Grynspan noted that Africa’s tech ecosystem growth has already proven impressive, as “hubs in artificial intelligence, 3D printing, blockchain, fintech [financial technology] and e-commerce are thriving” in countries such as Kenya, fostering innovation and strengthening Africa’s chance to capture technology-intensive global supply chains.

Higher wages and resilience

Creating an environment conducive to technology-intensive industries will raise wages, the UNCTAD chief said, underscoring that the average wage on the continent is $220 per month while in the Americas, in comparison, it is nearly $670.

According to UNCTAD, deeper integration into global supply chains would also diversify African economies, boosting their resilience to future shocks.

Attract investment

However, for this to happen, more investment will be needed, Ms. Grynspan said. The report highlights the fact that currently, only about two per cent of global investments in renewable energy go to Africa.

Paul Akiwumi, Director of UNCTAD’s Division on Africa, Least Developed Countries and Special Programmes, said that in order to drive more large-scale private investment, regulatory barriers will have to be removed and regional industrial development plans put in place.

Mr. Akiwumi cited the example of a regional agreement between the Democratic Republic of the Congo and Zambia, allowing for the creation of an industrial zone for the production of electric car batteries. He also highlighted the importance of product registration and intellectual property in order to attract investors.

Urgent debt relief needed

Ms. Grynspan stressed that in order for Africa to be able to seize its competitive advantage, the continent’s economies need debt relief to create fiscal space so that countries can invest in strengthening supply chains and in education for their workforce.

She recalled that African countries pay four times more for borrowing than the United States and eight times more than European nations, as shown in UNCTAD’s recent “World of Debt” report.

‘Change the rules’

“This must change if Africa is to achieve its full economic potential and be a major actor in global supply chains,” the UNCTAD chief insisted, pledging the UN’s unwavering support to nations across the continent.

Ms. Grynspan highlighted UN Secretary-General António Guterres’ advocacy to “change the rules that reproduce these asymmetries” and fix the “distorted” perception of risk which international investors hold in relation to developing economies.

Distributed by APO Group on behalf of UN News.

What trends are emerging for African startups in 2022?

**Conclusion**

Foreign investment trends from 2018 through 2024 reveal Africa's dynamic shift towards renewable energy, technology advancement, and diversified industrial growth.

Which sectors are Chinese investments in Africa focusing on?

Investment hotspots concentrate in South, East, and West Africa, with European countries remaining predominant investors supported by American and Asian enterprises.

What trends are emerging for African startups in 2022?

Which countries are actively investing in Africa besides China?

Major projects reflect a mix of energy infrastructure, extractive minerals, and digital innovations.

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.

Strengthened partnerships between foreign investors and African firms, alongside regulatory improvements, nurture inclusive development.

What trends are emerging for African startups in 2022?

For University of Nairobi business administration students, these expanding sectors and international linkages herald promising career possibilities in finance, management, and entrepreneurship aligned with Africa’s accelerating integration into the global economy.

Business graduates should focus on honing skills in project finance, international trade laws, digital transformation strategies, and cross-cultural communication to thrive in FDI-related roles.

Developing expertise in sectors such as green energy, fintech, and agribusiness will position them to capitalize on Africa’s evolving investment landscape effectively.

This comprehensive overview equips prospective business professionals with the knowledge needed to identify and pursue emerging opportunities generated by Africa’s growing foreign investment landscape.