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AfricaMoney | August 18, 2017

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Mauritius ranks in top 5 source countries for outbound FDI in Middle East & Africa

Mauritius ranks in top 5 source countries for outbound FDI in Middle East & Africa

The island economy saw USD 3.25 billion of outbound capital investment in 2013, clearly demonstrating the success of its efforts in positioning itself as a preferred financial hub for investments into Africa, as well as Asia. (Image: Mauritius Insider)

Mauritius ranked among the top five source countries for outbound foreign direct investment (FDI) from Middle East and Africa (MEA) in 2013, with capital investment of USD 3.25 billion being routed through the island economy for overseas projects.

This clearly demonstrates the success of the island economy’s efforts in positioning itself as a preferred financial hub for investments into Africa, as well as Asia.

The Financial Times released the fDi Report 2014 in its fDi intelligence publication to show an overall increase in projects out of Middle East and Africa, such that FDI grew 21.81% over 2012 to reach a total of USD 48.02 billion.

However, project numbers and job creation declined by 11.54% and 26.41% respectively.

The UAE remained the leading country in the MEA region for outward FDI with USD 14.68 billion capital investment accounting for 30.56% market share, followed by Kuwait with USD 10.73 billion capital investment and 22.35% market share.

South Africa came third with USD 5.45 billion (market share: 11.36%) followed by Mauritius with USD 3.25 billion (market share: 6.77%) and finally Israel rounded up the top 5 with USD 3.12 billion or 6.49% market share.

Inbound FDI into the Middle East and Africa (MEA) region saw inflows rise 24.27% in 2013 but despite this increase in FDI, the number of projects being undertaken in the region decreased by 8.59% while job creation declined by 12.98%.

Iraq has attracted the highest FDI of USD 14.96 billion in 2013 with a market share of 15.14% while African countries tailed their Middle East counterparts.

Mozambique just made it to the Top 5 with USD 6 billion (market share: 6.09%), Nigeria followed at USD 5.8 billion, South Africa at USD 5.4 billion, Ethiopia at USD 4.5 billion, Algeria at USD 4.3 billion and Kenya at USD 3.6 billion, rounding up the top 10.

Also, coal, oil and natural gas was the leading sector for FDI into the MEA region in 2013, attracting USD 29.14 billion, a 52.01% increase over 2012, recording a 60.61% increase in the number of projects and creating 9,165 new jobs.

The wood, paper and apparel sector witnessed the largest percentage increase, from USD 200 million in 2012 to USD 3.8 billion in 2013, and creating more than 12,000 new jobs.

In contrast, the leisure and entertainment sector recorded the largest decrease in capital investment, with the USD 1.68 billion recorded in 2012 falling to USD 330 million in 2013 while jobs created in this sector fell by 81.05%.

The metals and minerals sector saw the greatest percentage decrease in recorded projects, from 59 in 2012 to 31 in 2013, showing that the extractive sector is no longer attracting a lion’s share of investments into the continent.

Further, African as a whole performed well in 2013, with a rise of 10.76% to USD 51.98 billion in inward capital investment, rebounding from a drop in inward FDI in 2012 to USD 46.92 billion from USD 70.92 billion in 2011.

Besides, the report noted that FDI growth in 2013 was particularly strong in small and medium-sized emerging and frontier markets, suggesting that foreign investors are focused on investing in growth markets with unexploited potential.

This trend is very positive for the role FDI can play in the coming years in the economic progress of developing countries.

Overall, Asia-Pacific remained the leading destination for FDI in 2013, with recorded projects bringing in capital investment of USD 184.67 billion.

The fDi Report is the authoritative annual review of Greenfield FDI by fDi intelligence. This year’s issue focuses for the first time on the capital investment announced by foreign investors rather than the number of FDI projects.

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