The UN Conference on Trade and Development (UNCTAD) released its World Investment Report 2024 on 20 June 2024, revealing a slight decline in foreign investment in Africa during 2023. Despite this overall decline, the clean energy sector showed significant positive trends.
Key Findings
- Overall Decline in Investment: The value of international project finance deals in African nations fell by 50% to $64 billion in 2023, following a 20% decrease in 2022. Announced greenfield projects also decreased from $196 billion in 2022 to $175 billion in 2023.
- Increase in Project Announcements: Despite the decline in value, the number of project announcements rose by 7%, surpassing 800 projects. Africa’s share of global greenfield megaprojects increased, with six projects each valued at over $5 billion.
Notable Projects and Investments
- Green Hydrogen Projects:
- Mauritania: The largest greenfield announcement was a $34 billion green hydrogen project.
- Egypt: Significant projects totaling $10.8 billion.
- South Africa: Three energy producers announced projects totaling $7.1 billion.
- Morocco: Substantial investments in green hydrogen.
- Electric Vehicle Value Chain:
- Morocco: A Chinese manufacturer plans to establish a $6.4 billion electric vehicle battery manufacturing facility.
- Renewable Energy:
- Africa secured $10.8 billion in project finance for wind and solar power production, with major projects in Egypt, South Africa, and Zimbabwe.
Importance of Foreign Direct Investment (FDI)
- FDI is essential for funding infrastructure and public services such as power and renewable energy.
- Rebeca Grynspan, Secretary-General of UNCTAD, highlighted that investment impacts human potential, environmental stewardship, and the pursuit of a more equitable and sustainable world.
Sustainable Development Goals (SDG)
- Over the past three years, Africa has accounted for about 30% of all investment values relevant to SDGs in developing countries, with a slight decrease to 27% in 2023.
- Progress in other SDG-relevant sectors, such as health, telecommunications, and transport, remains limited.
Policies and Agreements
- African Continental Free Trade Agreement Investment Protocol: Adopted in 2023, this protocol is expected to boost intra-regional FDI.
- National Investment Policies:
- Kenya and Nigeria, with assistance from UNCTAD, introduced national investment policies in 2019 and 2023, respectively.
- Nigeria’s policy focuses on investment promotion, facilitation, and sustainable development, encouraging responsible investor conduct in line with global standards.
Multiple Choice Questions (MCQs):
- What sector stood out as a significant positive in Africa’s foreign investment in 2023?
- a) Telecommunications
- b) Transport
- c) Clean energy
- d) Health
- Answer: c) Clean energy
- By what percentage did the value of international project finance deals in African nations fall in 2023?
- a) 20%
- b) 30%
- c) 50%
- d) 60%
- Answer: c) 50%
- Which country announced the largest greenfield project in 2023, and what was the project?
- a) Egypt; Solar power project
- b) South Africa; Wind power project
- c) Morocco; Electric vehicle battery facility
- d) Mauritania; Green hydrogen project
- Answer: d) Mauritania; Green hydrogen project
- How much investment did Egypt attract for its green hydrogen projects in 2023?
- a) $6.4 billion
- b) $7.1 billion
- c) $10.8 billion
- d) $34 billion
- Answer: c) $10.8 billion
- What was the value of the electric vehicle battery manufacturing facility planned by a Chinese manufacturer in Morocco?
- a) $5 billion
- b) $6.4 billion
- c) $7.1 billion
- d) $10.8 billion
- Answer: b) $6.4 billion
- How much did Africa secure in project finance for wind and solar power production in 2023?
- a) $6.4 billion
- b) $7.1 billion
- c) $10.8 billion
- d) $34 billion
- Answer: c) $10.8 billion
- Which agreement adopted in 2023 is expected to boost intra-regional FDI in Africa?
- a) African Union Trade Agreement
- b) African Continental Free Trade Agreement Investment Protocol
- c) UNCTAD Investment Agreement
- d) Africa Renewable Energy Agreement
- Answer: b) African Continental Free Trade Agreement Investment Protocol