The value of Foreign Direct Investments (FDI) in Africa dropped by 3 percent to an estimate of $18 billion on a (year-on-year) basis in the First Half (HI) of 2018 , according to the Investment Trends Monitor report by the United Nations Conference on Trade and Development (UNCTAD).
Based on the report, the volatile global economic environment and mixed commodity price treads were the important factors behind the weakened FDI to Africa.
There was also a relatively significant decline in FDI in the Western Africa region which dropped by 17 percent to $4.3 billion in H1 of this year from $5.2 billion in the same period of last year.
Among the sub-regions, only Southern Africa saw a significant increase in FDI up by 40 percent. The significant increase was driven by FDI volumes in South Africa which rose to $3.4 billion in H1 2018 from $1.1 billion in H1 2017.
Egypt remains the largest FDI recipient on the continent with an estimated increase of 24 percent compared to the first half of 2017.
Also the report stated that the expected growth in FDI inflows to Africa due to the advances in regional integration has yet to materialize and that the Africa Continental Free Trade Agreement (ACFTA), once in operation may trigger new investors interest in the continent.
Globally, FDI fell by 41 percent to an estimated $470 billion in the first half of this year from $794 billion in the same period of last year.
The report stated that the large repatriations by the United states of America parent companies of accumulated foreign earning from their affiliates abroad following tax reforms were responsible for the decline globally.
