Financial inflows to Africa increases from $27b to $126b in 10 years – AEO

The financial flows into Africa between the year 2000 and 2010 reaches $126 billion, according to the African Economic Outlook (AEO) website.

Drawing its data from the Organization for Economic Cooperation and Development (OECD), Development Assistance Committee (DAC), UNCTAD and the International Monetary Fund (IMF), AEO said “foreign direct investment (FDI), portfolio investment and official development assistance (ODA) increased almost fivefold, from $27 billion in 2000 to an estimated $126 billion in 2010.”

It is the changing composition of these flows, however, that best represents Africa’s new economic dynamism: since 2005 Africa has attracted more FDI than ODA flows, the AEO said.

According to the AEO, Africa’s share of global FDI flows has risen over the last decade, from 0.7% in 2000 to 4.5% in 2010.

“FDIs in Africa continue to be concentrated in a few countries and sectors, with 15 oil-exporting countries receiving 75% of FDI flows, pointing to a further need for diversification,” it says.

It indicated that Official Development Aid globally reached $120 billion in 2009, a 0.7% increase in real terms against 2008 figures.

Net bilateral ODA from donors that are members of the OECD Development Assistance Committee (DAC) to Africa, the AEO indicated totalled $28 billion in 2009, of which $25 billion went to sub-Saharan Africa.

This represents an increase of 3% in real terms over 2008 for all of Africa and an increase of 5.1% for sub-Saharan Africa, it said.

On portfolio investment, the Outlook said, flows to Africa peaked in 2006 at $24 billion and took a deep hit during the following years, bottoming at $22 billion in 2008.

“Since then an equally steep and impressive recovery has followed: in 2010 portfolio flows to Africa amounted to $22 billion, just $2 billion shy of the peak of 2006, and equivalent to 30% of FDI,” the AEO noted.

By Ekow Quandzie