UN World Investment Report 2010 - Office of Trade Negotiations

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the UNCTAD’s World Investment Prospects
Survey (WIPS) (UNCTAD, forthcoming a).
The strong performance of emerging Asian
economies that are important sources of
FDI in Africa will support a revival of FDI
inflows to Africa, and sustained intraregional
investment will help small and low-income
African countries ease their dependence on
flows from traditional economies (section
ii).
The outlook for FDI outflows is also improving.
Investment from Africa, especially
within Africa, is expected to rebound in 2010,
sustained by recovering commodity prices
and improving economic conditions in the
region’s main investing countries, such as
South Africa and Egypt.
(ii) New sources of investment in
Africa
TNCs from developing The expansion of FDI
economies are making a from developing econ-
rapid entry into Africa. omies continues to be
They are providing an important factor in
additional development Africa’s investment
opportunities and landscape in recent
access to global years. The share of
markets.
those emerging investors
in FDI inflows to Africa increased from
an average of 18 per cent in 1995–1999 to
21 per cent for the period 2000–2008 (table
II.2). The global financial crisis has reinforced
this pattern, as investments from
new sources proved more resilient than
FDI from developed countries.
Emerging TNCs from various regions.
Although developed-country TNCs still
account for the lion’s share of inward FDI
stock and flows to many African countries,
the presence of firms from developing
countries – in particular, developing countries
from Asia 3 – has been increasingly
significant (table II.2; UNCTAD, 2010a).
Behind this increase are some important
factors such as high commodity prices, the
growing internationalization of emerging
World Investment Report 2010: Investing in a Low-Carbon Economy
TNCs and fast-growing emerging economies
in need of natural resources.
FDI flows from developing Asia to Africa
now account for a major part of interregional
FDI flows among developing countries.
China, in particular, has become one of the
most significant foreign investors in some
sub-Saharan African countries, while India
and Malaysia are also substantial sources
of FDI to the region (fig. II.1).
When measured in value, most of the investments
in the region from developing
countries are resource-seeking, and often
involve state-owned enterprises such as
CNOOC (China), Petronas (Malaysia) and
ONGC (India) (table II.3). The largest
number of investment projects undertaken
by Chinese and Indian investors, however,
are in manufacturing and infrastructure (Gu,
2009); 80 per cent of Indian investments in
eight East African countries, for example, are
market-seeking. While labour costs in Africa
may not differ significantly from those in
the firms’ home economies, the duty-free,
quota-free access of African countries to
developed countries through the African
Growth and Opportunity Act (AGOA) and
the European Union’s (EU’s) Everything
But Arms (EBA) initiative have generated
some efficiency-seeking investment. This
Table II.2. Distribution of estimated inward
FDI flows and stock in Africa,
by home region
Share in world total (%)
Home region Inflows Inward stock
1995– 2000–
1999 2008
1999 2008
Total world 100.0 100.0 100.0 100.0
Developed countries 79.0 72.1 89.0 91.6
Developing economies 17.7 20.8 6.9 7.4
Africa 5.1 4.9 2.3 2.9
Latin America and the
Caribbean
5.5 0.7 1.3 1.3
Asia 6.7 15.2 3.1 3.2
South-East Europe and the CIS 0.3 0.0 0.0 0.0
Source: UNCTAD, 2010a.
Note: Compiled on the basis of Africa as the reporting host
countries. Unspecified regions are included in the total.