Africa is attracting many foreign investors, with China, the United States, the United Arab Emirates and the European Union deploying their FDI strategies.
China: The rise of private investors
Today, the scale of Chinese investment in Africa is demonstrated by the figures. From $4.9 billion in 2003, Beijing’s FDI amounted $473 billion in 2020, according to the consulting firm Iremos.
China prioritises South and West African projects, with 12 countries accounting for about 70 percent of Chinese investment. It should be noted that today, investments made on the continent are mainly made by private companies, which accounted for 75 percent of the amounts invested in Africa in 2020.
Present on the continent since the 1970s, Chinese companies are now thriving and count on giants, such as China Harbour Engineering Company and Weihai International. Active in the fields of infrastructure, raw materials and energy, they have made China the main creditor of the African continent, providing significant amounts of money to partner countries.
United Arab Emirates, a new regional player
The UAE capital enjoys a geographical advantage that enables it to position itself as a focal point between the African market and the Chinese investors. In terms of figures, trade (excluding hydrocarbons) between Dubai and Africa has soared by over 700 percent between 2002 and 2017. Emirati investments now extend to various sectors, including telecommunications and energy, with the company Etisalat present in several West and North African countries.
However, it is in the field of port infrastructure that the UAE stands out on the African continent. Dubai Port World manages several terminals in Senegal, Algeria, Egypt, Somalia and Mozambique. The importance of these investments allows a notable improvement in the quality of the infrastructure of the countries in which they are made.
Through an African strategy that is becoming clearer every year, the UAE has increased its investments in the cocoa industry in Ghana and Côte d’Ivoire. Emirati investments in Abidjan have reached $1 billion in 2020, according to the Dubai Chamber of Commerce and Industry.
These investments are enabling the rise of the local processing industry.
France and the European Union, a weakened historical presence
According to UNCTAD, the largest holders of foreign assets in Africa remain European states, led by investors from the United Kingdom ($65 billion) and France ($60 billion).
In order to compete with the Chinese silk roads, the European Union has launched the “Global Gateway” initiative to support the development of the African continent. 150 billion euros of investments should be distributed in several areas: ecological transition, digital transition, sustainable growth, health systems, education and
training, infrastructure.
United States: a lively ambition
In the framework of the American strategy, the government is the main actor, unlike in China. Since 2021, the US government has put in place nearly 800 trade and investment agreements in 47 African countries for
a total value that should exceed 18 billion dollars.
The U.S.-Africa Business Forum held in December 2022 was an opportunity for the U.S. government to announce over $15 billion in trade and investment commitments. These funds are mainly invested in sustainable energy, health, agriculture, digital transformation and infrastructure
The Millennium Challenge Corporation, which is mainly dedicated to climate change, should contribute to regional economic integration and the stimulation of African trade.
In the U.S. strategy, the government is the main actor, unlike in China. Since 2021, the U.S. government has put in place nearly 800 trade and investment agreements in 47 African countries with a total value expected to exceed $18 billion.
The U.S.-Africa Business Forum, held in December 2022, was an opportunity for the U.S. government to announce over $15 billion in trade and investment commitments. These sums are mainly invested in sustainable energy, health, agriculture, digital transformation and infrastructure.
The Millennium Challenge Corporation, which is mainly dedicated to climate change, is expected to contribute to regional economic integration and the stimulation of African trade.
Investments in Africa reflect the growing desire of governments to diversify and expand their economic influence, thus actively participating in the development of the African continent in various key sectors. Their importance is expected to continue to grow in the coming decades.
CP/fss/as/APA