Africa remained a relatively strong destination for foreign investors last year despite an 18 percent drop in foreign direct investment worldwide, a UN report said on Wednesday.
Foreign investment to the continent rose 5.5 percent to US$50 billion last year, according to the UN Conference on Trade and Development’s annual World Investment Report.
However, the percentage increase was significantly lower than in 2011, which saw a 9 percent boost over the previous year.
Foreign investment dropped to US$1.35 trillion worldwide compared to US$1.65 trillion in 2011, with spending hit by continued investor uncertainty over the world economy’s recovery since the 2008 financial crisis.
For the first time, the developing world overtook developed countries when it comes to foreign investment, bringing in 52 percent of foreign investment worldwide.
“Foreign direct investment has contributed to the development of nations in the developing world and will continue to play an important role,” Ghanaian Deputy Minister of Trade and Industry Nii Lantey Vanderpuije said at the launch of the report in Ghana’s capital, Accra.
The IMF announced in April that it expects Africa’s economies to grow at 5.6 percent this year, led by rapidly growing economies such as Mozambique and Nigeria.
However, some analysts warn that such growth has in some cases not equated with significant development and poverty reduction.
Countries like Ghana — considered a success story in west Africa — have seen their economies boosted by new discoveries of oil, which buoyed investor interest and helped lead to GDP growth of 7.9 percent last year.
In North Africa, the resurgence of oil-producing Libya brought the region’s foreign investment up by 35 percent.
New mining investments in the Democratic Republic of the Congo brought in a large chunk of the US$10 billion of foreign investment central Africa received last year, a 23 percent boost from the previous year.
East Africa also saw its investment dollars increase to US$6.3 billion last year from US$4.6 billion in 2011, thanks to new oil and gas developments in Uganda and Tanzania.
However, other countries did not fare so well.
Nigeria, the continent’s most populous nation and largest oil producer, saw its foreign investment dip by 21 percent due to the global economic slowdown and an insurgency by Islamist extremist group Boko Haram concentrated in the country’s north.
South Africa lost nearly a quarter of its foreign investment last year, with foreign businesses only bringing in US$4.6 billion to Africa’s largest economy last year.