Saturday, January 28, 2023
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BusinessFDI inflow drops to USD 2.5 bln

FDI inflow drops to USD 2.5 bln

Once a champion in Foreign Direct Investment (FDI) attracting to the tune of USD 4.2 billion, Ethiopia’s FDI has slowed to USD 2.5 billion, landing at the lowest amount recorded since 2016, The Reporter has learnt.

According to the Investment Trend Monitor, a report, the United Nations Conference on Trade and Development (UNCTAD) launched this week, FDI flows to Ethiopia slowed down to USD 2.5 billion last year from USD 3.2 billion in 2018. In contrast to Ethiopia’s case, East African countries show a growing trend and the region has scored a further growth jump to USD 8.8 billion.

Flows to Ethiopia, Africa’s fastest growing economy, slowed down by a quarter to USD 2.5 billion. China was the largest investor in Ethiopia in 2019, accounting for 60 percent of newly approved FDI projects,” the report noted.

Back in 2017, Ethiopia has engrossed nearly half of what the East Africa region has received; out of the entire USD 7.6 billion in FDI; with Ethiopia able to absorb USD 3.6 billion. That amount, however, was down by 10 percent from the 2016 figures. Nevertheless, this has made the nation to be atop peers in Africa, only bested by Egypt as the largest recipient in Africa. Back then, Ethiopia was named among the five leading host countries with Egypt, Nigeria, Morocco and Ghana.

However, for three consecutive years, the inflow has declined and currently has reached closer to the bottom of 2016, where the listed inflow was hanging around USD 2.2 billion. In fact, the FDI movement has seen a global decline and UNCTAD reports that 2019 has experienced a flat flow of FDI. However, FDI flows to Africa showed an estimated USD 49 billion, a rise of three percent against the dogged global economic uncertainties.

The report highlighted how Egypt has retained its top position and remains to be the largest FDI recipient in Africa with a five percent increase in inflows to USD 8.5 billion. Like Ethiopia, and Morocco has experienced a sharp decline to USD 2 billion from USD 3.6 billion in 2018.

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