Nigeria emerged the fastest-growing hub on the continent in terms of foreign direct investment (FDI) in 2020 attracting $6.6 billion, followed by South Africa ($3.8 billion), Angola ($3.1 billion) and Morocco with $2.4 billion in investments.
The “Africa Attractiveness Report 2021” by global auditing firm Ernst and Young also shows that FDI into Africa fell sharply by almost 50 percent in 2020 due to the Covid-19 pandemic, trailing all other emerging markets.
The telecommunications service sector received the highest capital investment totalling around $8.5billion, with the largest investments focused on Nigeria and South Africa as remote working and hybrid work models raised the demand for transformative business solutions.
Eastern Africa received the lowest foreign direct investment (FDI) in 2020 compared to its western and southern Africa counterparts, mostly due to policy bottlenecks and rising political tensions, like those in Ethiopia.
Kenya was the highest FDI recipient in the region and the fifth in Africa, attracting capital investments worth $500 million last year. This was a significant drop from the $2 billion it received in 2018.Tanzania was second, attracting $200 million while Uganda booked no foreign inflows in the year under review.
Southern Africa regained its lead as the largest FDI hub in Africa owing to its diversified economy, which has attracted investors.
Morocco and Egypt attracted most of the investment in the North while Nigeria, Ghana and Côte d’Ivoire dominated in the West. Angola took the lion’s share of FDI in Central Africa.
“Africa’s large resource-export-dependent economies felt the impact of commodity price declines and rapidly decreasing demand, particularly from China, causing them to fall into recession,” the report says.