New UN Figures: Egypt Got Biggest Share of FDI Directed to Africa in 2018

By: Yassmine ElSayed

CAIRO, Jan. 22 (SEE) - New figures released by United Nations Conference on Trade and Development (UNCTAD) yesterday revealed that Egypt attracted the highest rate of international investment flow to Africa during the past year.

The report which was covering the trends of global investments for 2019, was discussed by Prime Minister Dr. Mustafa Madbouli and Ambassador Alaa Yousef, Egypt's permanent representative to the United Nations in Geneva, on the sidelines of the Davos World Economic Forum.

The report pointed to a decline in world’s foreign direct investment flows in 2018, while Egypt witnessed the highest increase of foreign direct investment flows in Africa during the same year, with 7% to reach $ 7.9 billion, the most of which were in the real estate, food industry, oil and gas, and renewable energy.

According to Ambassador Yousef, the report mentioned that the foreign direct investment flows worldwide declined by 19% to $ 1.2 trillion. This decline was mainly in the developed countries, where foreign direct investment flows dropped by 40% to their lowest level since 2004. This is because US multinational companies shifted a large part of their profits to the US after adopting the Tax Reform Act, which mainly led to the decline of foreign investment flows to Europe by 73%. And on the other hand, the United States saw a decline in foreign investment flows by 18% in 2018.

In contrast, the report indicated that foreign direct investment flows to developing countries increased by 3% to reach $ 694 billion, with developing countries accounting for up to 58% of total global foreign investment flows, with 6% increase in Africa (mainly Egypt and South Africa), 5% in Asia, 4% in Latin America, where the developing countries in south east Asia accounted for the largest proportion of investment flows.

On other hand, Ambassador Yousef said that report anticipated an increase in foreign investment flows, especially in European countries. “This is true especially with some investors who announced plans to implement a number of new projects,” he added.

The report analyzed certain factors which negatively affected the foreign investment flows since 2013, and are expected to continue in the medium-term. Those imply aspects related to economic policies, the return of protectionist programs, the impact of the digital economy on global production patterns, as well as the decrease in profits of foreign direct investment over the past five years.

Commenting on this report, Dr. Madbouli stressed that the repeated positive feedback of the international institutions confirm that we are on the right track and that the interest of the political leadership in economic reform, supported by the Egyptians, has begun to bear fruit. He affirmed that the government will continue efforts to encourage domestic and international investments, and said: “Our presence in this World Economic Forum today, is to confirm these messages”.