Ghana registered a 52 percent decline in FDI in 2020, leaving inflows at US$1.9 trillion, from US$3.9 trillion in 2019, according to the World Investment report by UNCTAD.
Prior to the COVID-19 pandemic Ghana was regarded as one of the regions’ preferred destinations for investment.
The report describes the country’s stringent lockdown measures in the first half of the year. This contributed to the decline in investment. Ghana moved swiftly to impose restrictions, being among the first in the continent to impose mobility restrictions.
According to the report, the main investing economies in 2020 were Australia, China, the Netherlands, South Africa and the United Kingdom. The component of investments indicate that almost half of the FDI to Ghana was in manufacturing.
The rest of investments were seen in the services and mining sectors accounting for 25 and 16 percent of foreign investment, respectively.
Meanwhile, for sub-Saharan Africa region, the cumulative flow of FDI inflows decreased by 12 percent to US$30 billion, with investment growing in only a few countries.
Moreover, among countries in the West African region which experienced increase in flows of investment was Nigeria, albeit slightly. Inflows to Nigeria increased from US$2.3 billion to US$2.4 billion.
Senegal was also among the few economies on the continent that received higher inflows in 2020, with a 39% increase to $1.5 billion, due to investments in energy.
Other significant investments realized in 2020 was the new cement plant constructed by Dangote in Nigeria for $60 million.
Inflows increased in Mauritania by 10 per cent, to $1.0 billion, as a result of investments from China. FDI to Togoalmost doubled to $639 million, mainly due to investment from other West African countries.
FDI inflows in other regions of the continent
Central Africa was the only sub-region in Africa to register an increase in FDI in 2020, with inflows of US$9.2 billion, as compared with US$8.9 billion in 2019.
The Republic of Congo experienced increase in FDI flowsby 19 percent to $4.0 billion, which helped prevent a decline.
Furthermore, investment in the country was buoyed by flows in offshore oil fields. FDI also grew in the Democratic Republic of Congo and Gabon by 11 percent each, to $1.6 billion and $1.7 billion, respectively.
FDI to East Africa also fell to US$6.5 billion, a 16 percent decline by 2019. Also, FDI to Southern Africa accounted for most inflows.
In Angola, repatriation of capital by Multinational Entreprises in the oil and gas industry slowed, and the country registered net inflows of -$1.9 billion, as compared with -$4.1 billion in 2019. Inflows were steady in Mozambique, increasing by 6 per cent to $2.3 billion.
FDI inflows to North Africa contracted by 28% to $10 billion, down from US$14 billion in 2019, with major declines in most countries. Egypt remained the largest recipient in Africa, albeit with a significant reduction (-35%) to US$5.9 billion in 2020.
FDI outflows from Africa fell by two thirds in 2020 to US$1.6 billion, from US$4.9 billion in 2019. The highest outflows were from Togo (US$931 million).
Investment from Togo was largely directed to other African countries. Outflows from Ghana (US$542 million) and Morocco (US$492 million) were also significant, although they dropped by 8% and 45% respectively compared with 2019.
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