UN World Investment Report 2010 - Office of Trade Negotiations

36
$ million
Figure II.2. FDI from China to Africa,
2003–2008
6 000
5 000
4 000
3 000
2 000
1 000
0
2003 2004 2005 2006 2007 2008
Source: UNCTAD, FDI/TNC database.
World Investment Report 2010: Investing in a Low-Carbon Economy
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Chinese FDI outflows to Africa
Share of Africa in China's total outward FDI stock
%
up during the second half of the past decade,
with Egypt as the main destination. 5 Recently,
the Gulf Cooperation Council investments
in sub-Saharan African countries such as
Ethiopia, Sudan and the United Republic of
Tanzania have also been on the rise, especially
in agriculture (UNCTAD, 2009b).
TNCs from transition economies, mainly from
the Russian Federation, have also expanded
into Africa, seeking to enhance their access
to supplies of raw materials and moving into
new segments of strategic commodities. They
entered the African market either directly
(the total value of African M&A sales to
Russian firms reached $2 billion), or through
acquisitions of parent firms in developed
countries (UNCTAD, 2008a).
In addition to interregional FDI from developing
and transition economies, intraregional
FDI in Africa is increasing. The share of
African host countries in the outward stock
of South African FDI has increased from
less than 5 per cent before 2000 to 22 per
cent in 2008, reaching almost $11 billion
(table II.4). The 2,250 South African projects
in other African countries recorded in
2009 were concentrated in infrastructure,
telecoms, mining and energy.
Some 55 per cent and 84 per cent of the
stocks of Moroccan and Tunisian outward
FDI, respectively, goes to North Africa,
while more than a third of outward FDI from
Mauritius goes to Africa, mainly to Madagascar.
Furthermore, the share of Africa in
the inward FDI stock is high in Botswana
(32 per cent in 2007), Madagascar (21 per
cent in 2005), Malawi (27 per cent in 2004),
the United Republic of Tanzania (43 per
cent in 2005) and Uganda (18 per cent in
2003). Regional integration has facilitated
intraregional FDI in the continent (UNCTAD,
2009b). The key investors in the United Republic
of Tanzania, for instance, were South
Africa, Mauritius and Kenya – which partly
cushioned the impact of the global financial
crisis. Regional integration, by providing
access to larger markets, also fostered FDI
in general, including from other regions (Te
Velde and Bezemer, 2006).
Table II.4. South Africa’s outward FDI
stock in Africa, selected years
(Millions of dollars and per cent)
Items 1990 1995 2000 2002 2008
FDI stock in Africa 716 1057 1768 135310843
Share of Africa in total
FDI outward stock (%)
4.8 4.5 5.0 7.0 21.8
Source: UNCTAD, based on South African Reserve Bank; and
Page and te Velde, 2004.
Impacts on the African economy. As TNCs
from developing and transition economies
have a tendency to invest in labour-intensive
manufacturing, their FDI has a large potential
for employment generation. Brazil-based
TNC Odebrecht, for example, is one of Angola’s
largest employers. FDI in Lesotho’s
apparel industry has also generated muchneeded
employment. In addition, during
the period 2003–2005 developing country
investors doubled their employment in Africa
(UNIDO, 2007).
Technologies used by TNCs from developing
countries are likely to be suitable for other
developing countries and may therefore
contribute to technological upgrading in host
African countries (WIR06). A World Bank