Ghana continues to be a safe investment destination for global investors as the country surpasses Nigeria to become the largest recipient of Foreign Direct Investment (FDI) in 2018, the January 2019 issue (31) of Investment Trends Monitor by the United Nations Conference on Trade and Development (UNCTAD) has shown.
Released on Monday, January 21, 2019, the report said Nigeria recorded a 36% decline in FDI in 2018.
“In West Africa, Ghana ($3.3 billion) overtook Nigeria as the largest recipient of FDI in 2018. However, Nigeria reported a few significant greenfield project announcements in the oil and gas and chemical sectors, which could lead to a recovery in 2019,” the report in part read.
According to Investopedia.com, Foreign direct investment (FDI) is an investment made by a firm or individual in one country into business interests located in another country. Generally, FDI takes place when an investor establishes foreign business operations or acquires foreign business assets, including establishing ownership or controlling interest in a foreign company.
According to the report, Africa overall, registered a 6% increase in FDI inflows in 2018 (US$40billion, up from a revised US$38 billion in 2017), but the growth was concentrated in few economies and the aimed for the shift from the natural resources dominated FDI profile of the continent towards a more balanced sectoral distribution was only partially visible, in that the relatively diversified economies, such as Egypt and South Africa, saw more stable and increasing FDI inflows.
Egypt with an increase of 7% from $7.4 billion to $7.9 billion, the report added, was the biggest recipient of FDI in Africa in 2018 with investments in real estate, food processing, oil and gas exploration and renewable energy.
“In contrast, flows to the two largest oil producers of the continent, Nigeria (-36% to $2.2 billion) and Angola were low, with a decline and a net divestment respectively.
According to the report, the drop in FDI was most felt in developed economies, where inflows fell by 40%.
The dip recorded globally has brought FDI to the low point it reached after the global financial crisis.
