World Investment Report 2009: Transnational Corporations - Unctad

42 World Investment Report 2009: Transnational Corporations, Agricultural Production and Development
Group of economies
Table II.1. Cross-border M&A sales, by sector and by groups of economies, 2007–2009
(Millions of dollars)
All
industries
Primary
2007 2008 2009: first half
Manufacturing
Services
All
industries
Primary
Manufacturing
Services
All
industries
Primary
Manufacturing
Services
World 1 031 100 73 299 336 310 621 491 673 214 86 101 302 582 284 531 123 155 10 004 22 698 90 453
Developed economies 903 430 55 806 311 264 536 360 551 847 80 514 261 139 210 194 102 313 8 294 18 967 75 051
Developing economies 96 998 9 268 22 859 64 871 100 862 3 186 38 273 59 403 19 837 1 541 3 371 14 925
South-East Europe
and CIS (transition
economies)
30 671 8 225 2 187 20 259 20 505 2 401 3 169 14 934 1 005 168 360 477
Source: UNCTAD cross-border M&A database (www.unctad.org/fdistatistics).
A. Developing countries
1. Africa
In Africa, FDI inflows rose to another record
level of $88 billion in 2008 (figure II.2), despite the
global financial crisis, resulting in an increase of FDI
stock in the region to $511 billion (annex table B.2).
Cross-border M&As were an important contributory
factor in the increased inflows, more than doubling
their level of 2007 (annex table B.4). TNCs, mainly
from Europe and to a lesser extent Asia, stepped
up M&As of firms in the region in early 2008,
particularly in the manufacturing sector. Inflows as
a share of Africa’s gross fixed capital formation grew
to 29% in 2008, from 27% in 2007 (figure II.2). In
contrast, divestments by some African firms abroad
reduced FDI outflows from the region. A number of
policy measures adopted by several African countries
continued to make the business environment more
conducive to FDI – both inward and outward.
However, the sharp decline in commodity prices
and the slowdown in global economic growth in the
second half of 2008 may signal a possible reversal
of the trend towards rising FDI in 2009, breaking the
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Figure II.2. Africa: FDI inflows, by value and as a
percentage of gross fixed capital formation, by region,
1995–2008
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Source: UNCTAD, FDI/TNC database (www.unctad.org/fdistatistics) and
annex tables B.1. and B.3.
region’s six years of consecutive growth in inflows as
TNCs cancel or postpone new projects.
a. Geographical trends
i. Inward FDI: flows continued to
rise in most subregions
FDI inflows increased in four of the five
subregions of Africa in 2008. North Africa attracted
27% of the FDI to the region in 2008, compared
with 36% in 2007; and the 47 countries of sub-
Saharan Africa attracted 73% in 2008, up from 64%
in 2007. The distribution of inflows among the
top host countries changed little from the previous
year. The six countries of North Africa continued
to perform well in terms of inward FDI, while large
inflows to Nigeria, Angola and South Africa, plus
good performances in Congo, Ghana, Guinea and
Madagascar (each receiving more than $1 billion
worth of inflows in 2008) boosted overall FDI flows
to sub-Saharan Africa. Inflows rose in 29 countries,
and fell in the other 24 (annex table B.1). The decline
was due to TNCs cancelling or postponing projects
as a result of the global financial crisis. The main
FDI recipients included many natural-resource
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producers that have been attracting large shares
of the region’s inflows in the past few years,
as well as new commodity-rich host countries.
Developed countries remained the main sources
of FDI in the region, although the share of
developing countries, especially from Asia, has
been increasing over time.
The record rise of FDI inflows to the
region in 2008 was partly due to favourable
global commodity markets (at least during
the first half of the year) and good returns on
investment related to the high commodity
prices. TNCs, including firms from within the
region (sub-section a.ii), took advantage of this
situation to expand their regional operations,
opening a variety of exploration projects in new
locations and injecting large volumes of capital
into greenfield projects. They also undertook a
record level of cross-border M&As.