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U.S.A. remains Africa’s biggest investor as FDI rises on the continent, latest data show Updated for 2021


Updated: February 26, 2021

The United States remains the single biggest investor in Africa, while Western Europe is by far the biggest regional investor, the latest Africa Attractiveness report by EY shows.

Foreign investment in Africa up

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The report shows that Foreign Direct Investment (FDI) was up across Africa last year, although South Africa experienced a fall in project numbers, as it restles with a weak domestic growth.

The 2017 data shows that Africa attracted 718 FDI projects, up 6% from the previous year, as the continent continued to recover from a difficult preceding year.

Ajen Sita, CEO, EY Africa(Source: EY)

The higher project numbers were driven by interest in ‘next generation’ sectors;  manufacturing, infrastructure and power generation.

However, despite the rise in FDI, project numbers remain below the 10-year average of 784 projects (per annum).

South Africa remains the largest African FDI hub followed by Morocco.

The EY 2018 report, ‘Turning tides’, provides an analysis of FDI investment into Africa over the past ten years.

The report also highlights the countries with the strongest FDI gains, with Ethiopia, Kenya and Zimbabwe experiencing a major uptick in FDI during the 2017 year. By contrast, South Africa, Egypt, Mozambique and Cote d’Ivoire experienced declines in FDI projects in the same year.

“2017 was in many respects a key year for the continent. We saw multiple changes in leadership across a number of countries, including South Africa, Zimbabwe and Angola,” said Ajen Sita, EY Africa CEO.

Ajen Sita, EY Africa CEO –

Multiple changes in leadership in Africa.

“In addition, Kenya’s election was drawn out which created uncertainty at the time. Changes in leadership have in turn led to a renewed urgency to implement fresh policies as new administrations move to address slow economic growth.”

Emerging market investment into Africa slows

2017 saw a noticeable decline in emerging market investment flows into Africa. This is a major turnaround from the previous year when Asia-Pacific investors strongly increased inbound investments. Last year, investments from this region fell 16% while intra-African FDI also fell by 14%. The weaker intra-African flows were largely driven by a weaker appetite by both Moroccan and Kenyan investors into neighbouring countries. South Africa’s outward investment project numbers held steady as weak domestic growth saw companies continue the search for external growth opportunities across the continent.

North American (primarily the USA), and Western European FDI flows to the continent remain strong

FDI is more evenly allocated across the regions, as South Africa’s lead narrows

After the USA, which remains the single largest country investing into Africa, three of the remaining top five investors are European, namely the UK, France and Germany. Of the ten largest investing countries in Africa, six are Western European.

The report found that South Africa, Morocco, Kenya, Nigeria and Ethiopia were the dominant anchor economies within their respective regions, collectively accounting for 40% of the continent’s total FDI projects.

Overall these four major sub-regions each attract similar FDI when measured by project numbers. For the first time ever, East Africa became the single largest beneficiary of FDI with 197 projects (27% of total projects). Southern Africa, by contrast, fared lowest of the four major regions, at 162 projects (23%).

Whilst South Africa remains the continent’s leading FDI destination when measured by project numbers, for the first time ever the country’s lead is under threat with Morocco increasing its FDI projects by a sizeable 19% to share the top spot with South Africa.

“Over time and as Africa’s growth accelerates, we anticipate that South Africa’s share of inbound FDI will continue to decline, relative to the rest of the continent. This will be driven by sustained strong growth, particularly in the Eastern-hub economies, and revived growth in the West hub. It illustrates the need for South Africa to ensure its leading economic role across the continent is sustained”, Sita said.

Next steps to increasing Africa’s FDI

“There are major opportunities that the continent can benefit from after the recent leadership changes we have witnessed. These opportunities require emboldened leadership to drive renewed policy reforms and implement new initiatives which encourage inbound investment flows. There are some outstanding examples of how this has already worked in some countries, not least Rwanda, which is able to attract FDI well ahead of other economies of similar size, and indeed, ahead of much larger economies. By focusing on improving public sector efficiencies and finances, minimizing bureaucratic processes and partnering with the private sector on major projects, more countries can stimulate much needed FDI. In addition, they should continue to focus attention on increasing their scores on the ease of doing business and global competitiveness rankings”, Sita added.


Simon Ateba
Simon Ateba
Simon Ateba covers the White House, the U.S. government, the International Monetary Fund, the World Bank and other financial and international institutions for Today News Africa in Washington D.C. Simon can be reached on simonateba@todaynewsafrica.com


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