ADDIS ABABAB, Ethiopia has been ranked as one of the top performing African countries in attracting foreign direct investment (FD) FDI, registering a 46 per cent increase in FDI flows 2016, according to the latest World Investment Report produced by the United Nations Conference on Trade and Development (Unctad).
UNCTAD said FDI flows to Africa continued to decline in 2016 but some diversified countries in East Africa registered strong FDI inflows in 2016, with Ethiopia attracting more inflows than ever before. It added that the country stood out to become one of the largest recipients of FDI on the continent, posting strong and record growth in FDI — up 46 per cent to 3.0 billion US dollars — and becoming the second largest less developed country host economy, up from the fifth position in 2015.
According to the report, much of this achievement is derived from investments in infrastructure and manufacturing. The report also stated that the largest cross-border merger an acquisition (M and A) deal of the year (510 million USD) was also recorded in Ethiopia, with Japan Tobacco acquiring a local cigarette manufacturing facility.
It further noted that Ethiopia attracted new FDI in manufacturing, which could create opportunities for local small and medium enterprises (SMEs) to link to global supply chains.
The country is also cited by the report as one of the top performers in efforts to diversify its economy and consequently its FDI pool against extractive investment which hitherto African and land-locked economies had been known for.
Diversification of inflows is advancing, especially in economies which have recently attracted sizeable FDI such as Ethiopia, despite the persistent weight of natural resources in FDI, the report pointed out.
The report added that although China was one of the major sources of FDI, foreign investors from other economies have started investing more in Ethiopia’s agro-processing, hotels and resorts, as well as in its manufacturing activities.
The report outlined a slight decline in FDI inflows to landlocked developing countries (LLDCs) and said these countries continue to play only a marginal role in the global FDI scene. However, Ethiopia stands out among this group of countries by continuing on its positive trajectory for a fourth consecutive year.
Source: NAM NEWS NETWORK