Complex Made Simple

Egypt tops in FDI flows in MENA

UAE attracted highest number of projects – 304 – to reach $13 billion

Egypt recorded the greatest increase in greenfield foreign direct investment (FDI)* in the Middle East and Africa region, with $18 billion in investments, according the latest figures.

The total FDI flowing into the region rose by 22 per cent to reach $121bn in 2014, while the number of FDI projects declined by six per cent.

The UAE was the leading country by the number of FDI projects attracted, with a growth of 11 per cent in 2014. It drew 304 projects to reach $13bn last year, according to fDi Intelligence, a specialist unit of the Financial Times dedicated to foreign direct investment. The country also dominated outward FDI, accounting for 50 per cent of capital investment and 40 per cent of FDI projects overseas.

Egypt, Angola, Morocco, Ghana and Zambia moved into the top ten destinations in the region by capital investment, replacing Iraq, Jordan, Ethiopia, Algeria and Kenya.

Though outbound FDI from the MEA decreased by 21 per cent in 2014 to reach $38bn, India won the highest number of projects from the region.

Globally, capital investment increased by an estimated one per cent from $642bn in 2013 to $649bn. However, the number of FDI projects declined slightly in 2014, decreasing by one per cent to 12,069.

“2014 was a tough year for FDI, with greenfield investment growing by only a tiny percentage,” says Courtney Fingar, head of content for fDi Intelligence.

“Over the next five-year period, FDI is predicted to grow on average by 2.5 per cent per year. However, expect 2015 to prove difficult, forecasting a range of between ­–5 per cent and 1.38 per cent growth,” says Dr Henry Loewendahl, senior vice-President, fDi Intelligence.

“But overall, the picture will remain cloudy for FDI flows into 2015, as major economies such as Brazil and Russia experience economic slowdowns, China’s breakneck growth decelerates and many eurozone economies continue to struggle,” adds Fingar.

*Greenfield FDI differs from foreign direct investment proper, in that it is a measure of new capital, plant and infrastructure projects built by foreign companies in a region. It does not include investments to repurpose existing capital, plant or infrastructure, also called brownfield investment. Capital investments are funds invested in a firm or enterprise for the purposes of furthering its business objectives.