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AfricaMoney | September 22, 2017

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World Investment Report 2015: Mauritius attracts sizeable FDI flows among SIDS

World Investment Report 2015: Mauritius attracts sizeable FDI flows among SIDS

Mauritius was among the most attractive destinations for FDI flows among SIDS, together with Trinidad and Tobago, the Bahamas, and Jamaica, which accounted for more than 72% of the total inflows to all small island developing states, where cross-border acquisitions drove the increased FDI flows in Mauritius.(Image:teneriffa-mauritius.de)

FDI inflows to small island developing States (SIDS) increased by 22% to $7 billion in 2014, mostly due to a rise in cross-border M&A sales where cross-border acquisitions drove the increased FDI flows in Mauritius. Besides, Mauritius also featured among the largest destinations of FDI flows to SIDS, together with Trinidad and Tobago, the Bahamas, Jamaica, which  accounted for more than 72% of the total.

These figures were released in the world investment report for 2015, issued by the Division on Investment and Enterprise of UNCTAD, a global centre of excellence that deals with issues related to investment and enterprise development in the United Nations System.

This year’s World Investment Report, the 25th, aims to inform global debates on the future of the international policy environment for cross-border investment. The report shows that Global Foreign Direct Investment (FDI) inflows in 2014 declined 16% to $1.2 trillion. However, recovery is in sight in 2015 and beyond, where FDI flows today account for more than 40% of external development finance to developing and transition economies.

​Foreign direct investment (FDI) inflows to Africa as a whole remained stable at $54 billion in 2014, with decreases in North Africa being offset by rises in Sub-Saharan Africa, the 2015 report revealed.

In Sub-Saharan Africa, where investments from abroad rose by 5%, there is a variance by sub-region. FDI flows to West Africa declined by 10% to $12.8 billion, as the Ebola outbreak, security issues and falling commodity prices negatively affected several countries.

Southern Africa received $10.8 billion of FDI in 2014, down 2.4% from 2013. While South Africa remained the country that received the maximum foreign investment in the region as well as on the continent ($5.7 billion, down 31 % from 2013), Mozambique – the recipient of the third largest amount of FDI in Africa – also played a significant role, attracting $4.9 billion.
Foreign investment into Africa is increasingly being made by developing-country multinational enterprises, such as firms from China and India. Meanwhile, a number of firms from developed countries (in particular France, the United States and the United Kingdom) were large net divestors from Africa during 2014.

Demand from developing-economy investors for these divested assets was significant. As a result, African mergers and acquisitions increased by 32% from $3.8 billion in 2013 to $5.1 billion in 2014, especially in the finance and oil and gas sectors.

Finally, services account for the largest portion of Africa’s stock of inward FDI, although the share is lower than in other regions, and concentrated in a relatively small number of countries, including Morocco, Nigeria and South Africa. Services FDI nonetheless accounted for 48% of Africa’s total stock of FDI, more than twice the share of manufacturing, which stood at 21% and significantly more than the primary sector, which accounted for 31%.

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