During H1, 2018, the value of Foreign Direct Investment (FDI)  in Africa ($18 billion) decreased by 3% on a year on year basis, according to the United Nations Conference on Trade and Development (UNCTAD).

The poorest performance was registered in West Africa where the volume of FDI dropped by 17% from $5.2 billion to $4.3 billion. The obvious volatility of the world's economy and the unstable evolution of commodities created uncertainty for investors.

Despite this gloomy picture, some economies emerged from the lot. There is South Africa (going through a tumultuous period) that has seen the volume of FDI increased from $1.1 billion to $3.4 billion, representing a 210% increase. Egypt remains the leader in terms of FDI  attracted in Africa during the period under review with $4.32 billion captured during the period.

The UNCTAD estimates that international investors’ interest in Africa will grow as different integration projects, namely a continental free trade agreement, are implemented.

Apart from integration, many issues need to be addressed. According to data gathered by Ecofin Agency,  the overall amount of the private equity funds available for Sub Saharan countries are estimated at $5.2 billion. It is also noted that at $9.2 billion, the flow of mergers and acquisitions targeting African countries at the end of the first nine months of 2018 is the lowest of the period since 2007. These two indicators predict that there would be no acceleration of FDI in Africa in the middle term.

Idriss Linge