In 2024, Africa faced challenges in attracting foreign direct investment (FDI), with inflows declining by 3 percent to $53 billion. This downturn reflects a broader trend in developing countries, where FDI flows fell by 7 percent due to decreases in developing Asia and marginal declines in Latin America and the Caribbean.
Despite the overall decline, Africa registered a modest increase in greenfield project announcements, highlighted by several megaprojects such as the world’s largest green hydrogen project in Mauritania. However, international project finance in Africa fell significantly—by a quarter in the number of deals and by half in value—negatively impacting prospects for infrastructure investment.
The concentration of new projects in other regions like South-East and West Asia indicates that while greenfield projects in developing countries increased by over 1,000, Africa’s share remains small. This unequal distribution underscores the need for Africa to enhance its investment appeal to attract more diversified and sustainable FDI inflows, particularly in sectors relevant to the Sustainable Development Goals.
African countries have leveraged different strengths and strategies to attract FDI, from Ethiopia’s emphasis on manufacturing to Côte d’Ivoire’s growing agribusiness.
Despite challenges such as political instability and regulatory uncertainties and hurdles, these top-performing economies are attracting billions of dollars in foreign direct investment (FDI) through reforms, strategic resources, and improved business climates.
Nigeria ranked eighth among the top ten African countries attracting foreign investment, securing $1.8 billion. It has the third-largest economy among these countries—behind Egypt and South Africa—with its GDP representing 23% of the combined $1.554 trillion GDP of the top investment destinations in Africa. Additionally, Nigeria accounts for 33% of the total population of 656 million across these nations.
Here’s a look at the top FDI destinations in Africa according to UN Trade and Development World Investment Report (WIR) 2024.
1. Egypt
Egypt remains the top destination for FDI in Africa, receiving around $9 billion in 2023.
This is mostly because of its good location, sizable market, and continuous reforms that have enhanced the environment for doing business.
The energy and real estate industries have successfully drawn investments to the nation.
2. South Africa
South Africa attracted approximately $5 billion in FDI in 2023, primarily in the automotive, telecommunications, and renewable energy sectors.
Because of its infrastructure and relatively developed financial market, the country is a desirable place to invest; however, political and economic unrest has somewhat limited the country’s potential.
3. Ethiopia
Ethiopia saw around $3.2 billion in FDI in 2023, mostly in manufacturing and infrastructure.
Attracting foreign capital has been aided by the government’s emphasis on industrialization and its investments in industrial parks. However, political instability remains a concern.
4. Uganda
Uganda attracted $2.886 billion in foreign direct investment (FDI) in 2023, positioning itself as one of the top investment destinations in East Africa.
The country’s growing oil and gas sector, particularly the development of the Lake Albert oil project, has been a significant draw for foreign investors.
In addition to energy, the agricultural sector has also seen substantial investment, with projects focused on improving productivity and value addition. Government initiatives aimed at enhancing the business environment, such as tax incentives and infrastructural development, have further bolstered Uganda’s investment appeal.
5. Senegal
Senegal attracted $2.641 billion in foreign direct investment (FDI) due to its aggressive economic reforms and well-timed energy and infrastructure investments.
The country has become a hub for renewable energy projects, with significant investments in solar and wind power.
Senegal’s political stability and proactive government policies, such as the Plan for an Emerging Senegal (PES), have created a favorable investment climate.
The expansion of the Dakar port and the development of new industrial zones are also attracting foreign investors.
6. Mozambique
Mozambique secured $2.509 billion in FDI in 2023, largely due to its rich natural resources, particularly in the liquefied natural gas (LNG) sector.
The country’s vast offshore gas reserves have attracted major international energy companies, contributing to substantial investment inflows.
Infrastructure projects, including the development of new ports and railways, are also key areas of foreign investment.
7. Namibia
Namibia attracted $2.345 billion in FDI, with investments concentrated in mining, renewable energy, and tourism.
The country’s wealth of natural resources, including diamonds, uranium, and gold, has traditionally been a strong pull for foreign investors. Recently, the government’s focus on developing the renewable energy sector, particularly solar and wind, has led to new investment opportunities.
8. Nigeria
Despite its challenges, Nigeria remains a significant recipient of FDI, drawing around $1.8 billion in 2023.
The main draw is the oil and gas industry, but recent government initiatives to diversify the economy have included investments in technology and telecommunications. However, obstacles to more significant FDI inflows still exist, such as security worries and unreliable regulatory frameworks.
9. Côte d’Ivoire
In 2023, Côte d’Ivoire attracted $1.7 billion in Foreign Direct Investment (FDI).
A few of the main industries propelling this expansion are mining, energy, especially in renewable energy projects, and agriculture—the nation leads the world in the production of coffee and cocoa.
Despite political uncertainty and infrastructure deficits, Côte d’Ivoire’s stable environment and investment incentives make it a promising prospect for continued FDI inflows.
10. Democratic Republic of Congo
Democratic Republic of Congo (DRC) attracted $1.635 billion in Foreign Direct Investment (FDI).The country’s rich mineral resources, including cobalt, copper, and diamonds, are the primary drivers of investment, attracting multinational companies involved in mining and resource extraction.
The DRC’s position as a major supplier of key minerals for the global tech and electric vehicle industries makes it a significant player on the world stage.
However, challenges such as infrastructure deficits, corruption, and security issues in certain regions continue to pose risks for investors.
