direct foreign investment
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Egypt FDI likely hit $8 bln-$8.5 bln in fiscal year just ended -minister

Comments (0) Latest Updates from Reuters

By Ehab Farouk

CAIRO (Reuters) – Egyptian Planning Minister Hala al-Saeed told Reuters on Saturday that she projected foreign direct investment in the country had reached $8 billion to $8.5 billion in the 2016-17 fiscal year which ended in June.

Speaking on the sidelines of a news conference, Saeed said the government was targeting a 20 percent increase in foreign direct investment in the 2017-18 fiscal year which started this month.

Foreign direct investment in Egypt rose 12 percent in the first nine months of the 2016-17 fiscal year to $6.6 billion compared with $5.9 billion in the same period a year earlier, the investment ministry said earlier on Saturday.

Saeed told a news conference that the economic growth rate for 2016-17 would not fall below 4 percent and for the fourth quarter of 2016-17 not below 4.5 percent.

The government had projected a growth rate of 3.8-4 percent for the full fiscal year 2016-17.

Saeed said she expected the initial budget deficit for 2016-17 to come in at 10.4 to 10.5 percent. The real deficit for the 2015-16 fiscal year was 12.5 percent.

 

(Reporting by Ehab Farouk; Writing by Ahmed Aboulenein; Editing by Richard Balmforth)

 

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Africa fails to benefit from global investment surge

Comments (0) Africa, Business, Featured

Chemical Industry

Direct investment to Africa declined by 7% to $54 billion, giving the continent only 3% of the total worldwide investment, according to a new United Nations report.

Direct foreign investment soared in 2015 to its highest levels since the 2008 financial crisis, but Africa did not share in the wealth.

Globally, direct investment flows increased by 40% to $1.8 trillion, according to World Investment Report 2016 (pdf) by the United Nations Commission on Trade and Development.

At the same time, direct investment to Africa declined by 7% to $54 billion, giving the continent only 3% of the total worldwide investment.

While investment in North African nations, notably Egypt, increased, sub-Saharan Africa saw declines as resource-based commodities faltered and economies weakened, led by a decline of more than 60% in South Africa.

Egypt, Sudan see growth

Investment flows to North Africa increased by 9% to $12.6 billion, an increase largely driven by a boost in Egypt of 49% to $6.9 billion. The increase in Egypt reflected expansion of foreign investment in banking and pharmaceuticals as well as large investments in telecommunications.

Investment in Sudan increased 39% to $1.7 billion, thanks largely to continuing Chinese investment in oil production.

In sub-Saharan Africa, Angola reported investment more than tripled to a record $8.7 billion in investment in 2015 after years of declines. The UN report said the increase reflected loans to local institutions by foreign parent organizations.

Elsewhere on the southern continent, weak commodity prices stifled investment.

Investment in West Africa decreased by nearly 20% to less than $10 billion, in large part because of a slump in investment in Nigeria, Africa’s largest economy. Investment fell to $3.1 billion last year largely because of lower commodity prices, a faltering currency, and delays in major developments such as multi-billion dollar offshore oil operations.

Investment in Central Africa declines

In Central Africa, investment inflows dropped by more than a third to $5.8 billion. The Democratic Republic of the Congo and the Congo reported declines as commodities operations suspended operations.

Factory Workers in Kayonza, Africa

Factory Workers in Kayonza, Africa

East African investment was steady at $7.8 billion.

The European Union and the United States invested more than $2 million in Ethiopia. Investment in Kenya reached a record $1.5 billion as a result of investor confidence in the business environment and growing domestic consumption.

Southern African investment also held steady at just under $18 billion, driven primarily by the large increase in investment in Angola.

South Africa posts steep drop

Other nations saw steep declines. Investment in South Africa fell by 69% to $1.8 billion, its lowest level in a decade. The UN report said weak economic performance, lower commodity and higher power costs were to blame.

After years of record growth, Mozambique saw a 24% decline to $3.7 billion. The report blamed uncertainty about the 2015 elections and lower gas prices as well as the cancellation of major mining operations.

Meanwhile, investment outflows from Africa also declined by 25% to $11 billion because of weaker export demand and falling commodity prices. The continent’s largest foreign investor, South Africa, cut its investments by 30% to $5.3 billion. Angola investors reduced their investment abroad to $1.9 billion, less than half the 2014 amount.

U.S., U.K. lead in African investments

The top investor economies to Africa in 2015 were the United States ($66 billion), the United Kingdom ($64 billion), and France ($52 billion). As China seeks to increase ties to the continent, direct investment from the Asian nation more than tripled from $9 billion to $32 billion. South Africa was the fifth largest investor to the continent at $26 billion.

The report said the global investment surge was unlikely to continue at 2015 levels. It attributed the 2015 increase to a spate of cross-border acquisitions and  mergers.

The United Nations said investment to Africa could grow this year to as much as $60 billion. New projects valued at nearly $30 billion were announced in the first quarter of the year, up 25% from the same period a year earlier.

The report predicted the largest increases in Egypt and North Africa. “But a more optimistic scenario also prevails more widely, for example in Ethiopia, Mozambique,  Rwanda and the United Republic of Tanzania,” the report said.

However, depressed prices for oil and mining commodities will continue to be a drag on investment in other parts of Africa.

“The world economy continues to face major headwinds, which are unlikely to ease in the near term,” the report said.

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