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The global financial crisis notwithstanding, Nigeria and the rest of African countries, raked in $126 billion between 2000 and 2010 in Foreign Direct Investment (FDI), portfolio investment and Official Development Assistance (ODA), a research report has shown.
The report, which is the African Economic Outlook estimated that ODA and FDI increased almost five-fold, from $27 billion in 2000 to an estimated $126 billion in 2010
The report, a joint effort of the African Development Bank (AFDB), United Nations Economic Commission for Africa (UNECA) and the Organisation for Economic Cooperation and Development (OECD) Development Center, noted that the last decade had been one of impressive changes in the volume and composition of financial flows to Africa.
“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. Moreover, Africa’s share of global FDI flows has risen over the last decade, from 0.7 per cent in 2000 to 4.5 per cent in 2010.
“These figures offer an impressive testimony to Africa’s changing role in the world and its increasing ability to harness the opportunities from globalisation. Nevertheless, some challenges remain,” the report stated.
The outlook observed that foreign direct investment in Africa continued to be concentrated in a few countries and sectors, with Nigeria and14 oil-exporting countries receiving 75 per cent of FDI flows, pointing to a further need for diversification.
“Many governments are tackling this challenge and show commitment to improving institutional frameworks. The outlook for FDI flows to Africa in 2011 is basically good given the strong recovery in many parts of the world and rising resource prices. The current uncertainty in north Africa renders predictions difficult, however, as the region has been Africa’s top FDI destination for the last five years, ”the report revealed.
The report also showed that ODA globally reached $120 billion in 2009, a 0.7 per cent increase in real terms against 2008.
ODA, the report added, increased despite the financial crisis and its severe impact on government budgets in donor countries.