FDI flows shrink globally by 13%, Africa doing great: Manager of Investment and Enterprise Division at UNCTAD

Doaa A. Moneim , Tuesday 23 Jul 2019

Foreign direct investment (FDI) declined globally by 13 percent in 2018 as investment flows decreased by $1.3 million from $1.5 million recorded in 2017, manager of the Investment and Enterprise Division at the United Nations Conference on Trade and Development (UNCTAD) James Zhan said.

Zhan said that despite this reduction, foreign investments in Africa are promising, as the continent has succeeded in recovering from the aftermath of the global decline in FDI. Investments in the continent reached $46 billion in 2018, a year-on-year increase of 11 percent.

Zhan made the comment during a roundtable held on Tuesday and attended by a number of Egyptian ministers and top officials to review the UNCTAD’s annual report about the global FDI.

“Multinational companies in developing countries are expanding their activities in Africa. Investors from the countries with the highest growth rates still have the lion’s share of these investments, especially Holland, France, the UK and China. I expect that growing in demand, and subsequently increasing prices of goods that Africa is the main producer of, would reinforce FDI flows to the continent during 2019,” Zhan highlighted.

Zhan welcomed the Egyptian government’s move to establish private economic zones as an effective tool to attract more investments, adding that there are 5,400 private economic zones around the world.

He suggested that Egypt’s government establish more private economic zones because they offer all the incentives that foster investment as well as provide fertile grounds for the growth of industries and services.

Regarding Egypt’s economic reforms, which have led to economic liberalisation and an investment boom, Zhan said that international data reveals that liberalisation and investment promotion have helped increase investments by up to 66 percent in countries that have adopted economic reform programs, while those who impose restrictions on trade and investments suffered from investments flow decreases by up to 34 percent.

“I urge the Egyptian government to maximise benefits from the investment and trade agreements it has signed recently as there are 3,400 trade agreements in force between all the world’s countries,” he stated.

There is, according to Zahn, significant growth in investment flows in the sustainable development sector, especially in the green economy and human investment, such as agriculture, food security and education.

“This kind of investment has an effective impact on growth and development alike. Egypt is working on attracting such investments, such as the Benban solar energy project, which has won the Head of the World Bank Award. There is a real chance for growing FDI flows in Egypt and benefiting from the current global trade wars.Due to these wars, investorsare keen on distribute their investments, so, Egypt is a perfect destination to receive these investments due to the investment and trade relations that link it with the European Union, Africa and the Arab region,” Zhan said.

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