NIGERIA received over $6.3 trillion (N1 trillion) Foreign Direct Investment (FDIs) last year, the African Economic Outlook report has revealed.
Besides, Africa’s external financial flows have quadrupled since 2000 and are projected to reach over $200 billion in 2014.
But the report listed the regional risks to this outlook to include lingering unrest and instability in the Sahel region, Northern Nigeria, Central African Republic and South Sudan, which could weigh on investor sentiment in neighbouring countries
According to the report, which was released recently, the largest recipients of investment inflow into Africa as South Africa and Nigeria, with respectively an estimated $6.4 billion and $6.3 billion.
It noted that West Africa is expected to continue its rapid growth. “After some moderation in 2013, growth is likely to accelerate to above seven per cent in 2014 and 2015.
“Growth in the region is widespread with most countries achieving six per cent or more. In Nigeria, growth is mainly driven by non-oil sectors, such as agriculture, trade, ICT and other services”.
The report explained that the oil sector, which accounts for 37 per cent of Gross Domestic Product and about a fifth of government revenues, is currently a drag on growth and suffers from theft, pipeline vandalism and weak investment. “Ghana’s growth will remain robust, boosted by oil and gas production and increased private and public investment.
“Côte d’Ivoire is also expected to remain on a high growth path. With improved political stability, public and private investment have become important drivers of growth. Growth is supported by favourable developments in agriculture, manufacturing and services. Sierra Leone is currently the fastest growing country in the region with growth mainly driven by iron and ore exports, although other sectors, in particular agriculture and construction, also contribute.
“In Mali, the economy rebounded in 2013 after the backlash in 2012 caused by the political and security crisis, and growth is expected to improve further in 2014 and 2015”, it added.
According to the report, Mozambique received $4.7 billion; Morocco, $4.3 billion; Ghana, $3.3 billion; and Sudan, 2.9 billion close the list. “Those six countries were also the largest recipients in 2012. Egypt, traditionally one of top three recipients, has yet to recover to its pre-Arab Spring level: FDI averaged $9.1 billion per year over 2005-10 but was only $1.9 billion per year over 2011-13.
AfDB noted that foreign investment – direct and portfolio – has now fully recovered from the 2009 economic crisis and is projected to reach over a record $80 billion in 2014, making it the largest financial flow to Africa.
It noted that though resource- rich countries remain the prime destination for FDI to Africa, manufacturing and services attract an increasing share of the over 750 new Greenfield FDI projects.
“Official remittances have been continuing their increasing trend since 2009 and are projected to reach $67.1 billion in 2014. In contrast, Official Development Assistance’s (ODA) share of total external flows keeps diminishing, from 38 per cent in 2000 to 27 per cent in 2014 (estimated at $55.2 billion). Despite this downward trend, ODA still represents the largest external financial flow to low-income African countries. Tax revenues continue to increase in Africa and reached $527.3 billion in 2012. They should not be seen as an alternative to foreign aid but as a component of government revenues that grows as countries develop”, it added.
In the report, Angola, Gabon and Nigeria recorded the highest rates among oil-producing countries with figures ranging from five per cent to seven per cent. Equatorial Guinea saw growth fall below one per cent in 2013 from above five per cent in 2012, following the exhaustion of a major oil field. In the case of Libya, socio-economic disruptions during the year prevented the rolling out of new investment, and led to growth falling below one per cent.
It added: “Investment-driven economies registered growth rates of about four per cent on average, comparable to those of their peers – low middle income economies – elsewhere in the world. Six countries were in this category, posting growth rates of three per cent and above. The tourist sectors in Kenya, Morocco and Seychelles continued to perform well, but manufacturing performance was below expectations. Cape Verde, Egypt, South Africa and Tunisia grew at below three per cent”.
SOURCE: GUARDIAN NEWS, NIGERIAfree vector