FDI returning to Africa as new COVID-19 cases remain low

"Anecdotally, we understand FDI is largely focused on tech start-ups and successful tech businesses, especially in countries such as Kenya and Nigeria. Impact investment and sustainable finance into businesses in line with the UN’s Sustainable Development Goals (SDGs) are also evident from international institutions and Development Finance Institutions (DFIs)."

Devdiscourse News Desk | Accra | Updated: 12-11-2020 11:04 IST | Created: 12-11-2020 10:51 IST
FDI returning to Africa as new COVID-19 cases remain low
Representative image. Image Credit: ANI

Africa is in a good position to attract foreign investment as the impact of COVID-19 on the continent has been relatively less, according to investment experts as reported by News Ghana.

Initially, fund managers had seen an outflow of capital with the emergence of the COVID-19 pandemic crisis in Africa but business operations that had reduced after the pandemic has started growing with the unfolding of the pandemic, Faizal Bhana, the director of the Middle East, Africa, and India said.

Bhana in an interview on COVID-19 and investment in Africa said, "we are now witnessing international multilateral institutions direct funds into African countries, co-investing in healthcare and emergency infrastructure".

FDI returns have shown a steady pace in the economy whereas the volume remains at the bay, according to him. He said, "anecdotally, we understand FDI is largely focused on tech start-ups and successful tech businesses, especially in countries such as Kenya and Nigeria. Impact investment and sustainable finance into businesses in line with the UN's Sustainable Development Goals (SDGs) are also evident from international institutions and Development Finance Institutions (DFIs)".

He shared the observations as FDI is expected to return at a significant level by the first half of 2021 saying, "Africa still provides a significant investment opportunity in key sectors, such as technology, education, healthcare, agriculture, infrastructure, and housing. The returns and potential are higher than those in more mature markets, despite the inherent perceived risks".

Although with the steadier rise, he mentioned that the economy has to function beyond local and traditional sources of finance and investment. "Governments will have to deploy and use different methods and sources of investment to return to the growth trajectory. Financial and other incentives will need to be ramped up to make African economies more competitive to attract the international capital that will inevitably be looking for a home to invest in," he said.


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