Sunday, March 7, 2021
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FDI flows to Africa to contract between 25% and 40% FDI projected to decrease by a further 5% to 10% in 2021 and to initiate a recovery in 2022, the report says. The pandemic is a supply, demand and policy shock for FDI Investment flows are expected to slowly recover starting 2022, led by global value chains FDI was already on the decline before the crisis The COVID-19 crisis has arrived at a time when FDI was already in decline, with the continent having experienced a 10% drop in inflows in 2019 to $45 billion. Global economy worse than 2008 crisis – United Nations Trade in many developing countries projected to ‘nosedive’, warns UNCTAD. A United Nations report says ‘’trade in many developing countries is expected to “nosedive” in the second quarter of 2020, owing to the unprecedented effects of the coronavirus pandemic, UN economists have disclosed. In a new report from UNCTAD, the UN highlighted data showing that the value of international trade in goods has declined by about five percent between January and March. Worrying as that is, commerce is expected to plummet further – by a staggering 27 percent – from April to the end of June. Worse than the 2008 crisis: To put it into perspective, this is even worse than the near 25 per cent contraction in world trade in the aftermath of the 2008-9 financial crisis, from which the global economy has yet to recover fully. COVID-19 has caused a steep drop in investment flows, hitting developing countries hardest. Recovery is not expected before 2022, says new UNCTAD report. A WORLD INVESTMENT REPORT authored by the United Nations Conference on Trade & Development, UNCTAD predicts that Global foreign direct investment (FDI) flows are forecast to decrease by up to 40% in 2020, from their 2019 value of $1.54 trillion, according to UNCTAD This would bring FDI below $1 trillion for the first time since 2005. In addition, FDI is projected to decrease by a further 5% to 10% in 2021 and to initiate a recovery in 2022, the report says. “The outlook is highly uncertain. Prospects depend on the duration of the health crisis and on the effectiveness of policies mitigating the pandemic’s economic effects,” said UNCTAD Secretary-General Mukhisa Kituyi. AFRICA:  The trend of declining foreign direct investment (FDI) to Africa is set to exacerbate significantly in 2020 amid the dual shock of the…

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