Foreign Direct Investment in African Countries

Foreign Direct Investment (FDI) news has portrayed consistent and extensive growth in various countries in the past decade. However, there is a decline in these investments as the global economy is still trying to regain stability after the covid pandemic, which adversely impacted the economic capabilities of various countries. The Ukrainian also left the world in more instability and propelled the challenge of the dollar as a reserve currency, putting countries in a state of economic instability that limits their participation in FDI. Despite these factors, FDI plays a pivotal role in propelling economic expansion, facilitating the transfer of technology, generating employment opportunities, and fostering infrastructure development in African nations. Regardless of the robust expansion, the influx of investments directed towards Africa constituted a mere 5.2% of the worldwide foreign direct investment in 2021, exhibiting a rise from 4.1% in the previous year (UNCTAD, 2022). Furthermore, the rate of FDI varies depending on the regions of this continent. For instance, investment flows in Southern, Eastern, and Western Africa experienced an increase, whereas Central Africa observed minimal significant change, and North Africa recorded a decrease (UNCTAD, 2022). Therefore, analyzing the crucial role of FDI in East, South, and West African countries will provide essential insights into the varying dynamics of FDI in these regions compared to other regions.