April 24, 2024

East Africa weathers storm to record growth in FDI

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28.08.2018, Rwanda, Kigali: Women work at the Chinese clothing company G&H Garments. The company has been producing sportswear, workwear and protective clothing in East African Rwanda for three years, mainly for export to the USA and Europe. In addition to Rwanda, the company has invested in production facilities in Kenya, Senegal and Ethiopia. (On dpa "The dragon in the land of the lion: China's rapid expansion in Africa" of 31.08.2018) Photo: Kristin Palitza/dpa (Photo by Kristin Palitza / DPA / dpa Picture-Alliance via AFP)

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East African countries defied economic turbulence occasioned by the Russia-Ukraine war and inflationary pressures to post a 17 percent growth in foreign direct investment (FDI) inflows.

According to the latest statistics from the United Nations Conference on Trade and Development (UNCTAD), investment inflows into Africa were impacted by the difficult economic environment that characterized a good part of last year.

The worst-affected region was Southern Africa, where investment inflows dropped sixfold to $7 billion in 2022, while the Central and West African regions posted declines of seven and 35 percent, respectively.

Global FDI fell by 12 percent to $1.29 trillion in 2022 from $1.48 trillion recorded in 2021, a result of the multiple crises witnessed last year, which caused many investment plans to be put on hold across the globe.

But investments from foreigners into East Africa proved resilient despite the economic woes, rising from the $4.9 billion recorded in 2021 to $5.8 billion last year. South Sudan posted the largest increase in FDI inflows, which rose 80 percent to $121 million, nearly double the $67.5 million it received in 2021.

In conclusion, according to the latest statistics from the United Nations Conference on Trade and Development (UNCTAD), investment inflows into Africa were impacted by the difficult economic environment that characterized a good part of last year.

written by @enock katamba

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