In its World Investment Report 2024, the United Nations Conference on Trade and Development (UNCTAD) unveiled the list of countries that benefit most from foreign direct investment (FDI). The report, published on 20 June, highlights an overall decline in FDI worldwide, by an average of 10%.

In Africa, the Sahel region has recorded one of the sharpest falls. Of the three countries that make up the Confederation of Sahel States (CSS) – formerly known as the Alliance of Sahel States, and comprising Burkina Faso, Mali and Niger – Burkina Faso has suffered the most, with an 87% drop in FDI.

In 2023, this amounted to $85m in the country, a drastic drop from the $670m recorded in 2022. This collapse does not, however, match the negative balances recorded during and after the Covid-19 period. The country, led by Captain Ibrahim Traoré, suffered a wave of disinvestment between 2020 and 2021, amounting to -$102m in the first year and -$80m the following.

The mining sector has been hard hit, with bankrupt Canadian company Travelli Mining, for example, closing its Perkoa mine in 2022. As the only zinc mine in the country, it has been struggling to find a buyer ever since.

Stability in Mali

Niger, on the other hand, which has similarly been ruled by a military junta since July 2023, has managed to keep foreign cash flow coming in. The effects of sanctions did not impact the total amount of FDI in 2023 – the country attracted $966m, the same as the previous year.

Niger, led by General Abdourahamane Tiani, has severed relations with France, and having just withdrawn French nuclear energy company Orano’s licence to operate the Imouraren uranium mining site, it may find it does not attract the same level of foreign investment in 2024.

For Étienne Giros, chairman of the French Council of Investors in Africa, trust needs to be established between governments and foreign businessmen. “The political environment is not conducive to French investment. There is mistrust of France. Political uncertainty is causing people to lose confidence in the future as regards the CFA franc and ECOWAS,” he explained. This is a situation which, in his view, “worries investors, who like stability”.

Of the three CSS countries, Mali is the one that has managed to maintain stability when it comes to the FDI it has received since 2020. The country’s inflows have risen from $537m in 2020 to $698m in 2023. These figures are close to the volume before the military coup led by Colonel Assimi Goïta in September 2020 – $721m in 2019.

Senegalese domination

With $13bn in FDI expected by 2023, West Africa is one of the most popular regions for investors on the continent, on par with the Maghreb. East Africa, with $11bn, completes the podium. In West Africa, Senegal’s figures stand out. The country, which has almost trebled its FDI in five years, has captured one-sixth of the total sums invested in the region.

Its direct investment rose from $848m in 2018 to $2.64bn in 2023, after peaking at $2.92bn in 2022. Buoyed by an increase in investment in public and private infrastructure projects, the country is set to record growth of 8.8% in 2024, according to the Economic Commission for Africa.

 

In Côte d’Ivoire, investment is set to increase by 10% in 2023 compared with the same period the previous year, rising from $1.59bn in 2022 to $1.75bn in 2023. Industry and the service sector are the priorities for FDI, according to the Côte d’Ivoire Investment Promotion Centre in its report on FDI in 2023.Less well off than the Ivorian and Senegalese regional drivers, Togo has nonetheless recorded the strongest growth on the African continent, going from a negative balance of $173m in 2022 to a positive balance of $34m in 2023.