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The Africa Confidential Blog

  • 20th October 2022

Investment booms in Africa but growth slumps

Blue Lines

Growth in Africa is slowing this year according to the World Bank and IMF. Much of that seems to have been triggered by the spillover from Russia's war on Ukraine, spiralling food and fuel prices and rising interest rates and debt servicing costs. But there is a growing focus on rising investment levels in Africa.

The Africa Investment Forum in Abidjan in early November is one of several events this year aimed at sealing investment deals. Even so, Africa is likely to fall short of its headline FDI figure, which hit a record US$83 billion in 2021, according to UNCTAD's World Investment Report 2022, more than double the amount reported in 2020 at the height of the Covid-19 pandemic. The statistic is somewhat misleading as almost 50% of the increase was due to South Africa's Naspers conglomerate organising a share swap. Elsewhere, energy and extractives projects made up most of the investment: Mozambique and Nigeria benefited and a string of Chinese-funded projects boosted Ethiopia's FDI figures. Across the board, Africa saw an average annual growth of 6.2% in container port traffic, with a slight uptick in agricultural investment.

The uptick in oil and gas investment will continue, as western countries seek alternatives to Russian fossil fuels. But unless the COP27 climate summit in Egypt confounds expectations, investment in green energy will have to wait.