Total Foreign Direct Investment (FDI) is the total net inflows of foreign investments into another country, the trend being the gateway to the Gold.
FDI will always go where it is easiest and fastest to yield high return on investment. The total reported will usually be about net inflows into countries. The key to these reports is a road map to the countries that are yielding satisfactory return on investments to investors. The latter typically emanates from countries with good sustainable economic growth rates where the market share, market sizes are large and they often are coupled with a good investment climate.
Foreign direct investment (FDI) is a key element in international economic integration. FDI creates direct, stable and long-lasting links between economies. It encourages the transfer of technology and know-how between countries, and allows the host economy to promote its products more widely in international markets. FDI is also an additional source of funding for investment and, under the right policy environment, it can be an important vehicle for enterprise development.
For example the Organization for Economic Co-operation and development (OECD) list the following overview of total foreign direct investment:
“FDI activity recovered in 2010 after two years of sharp declines following the global financial crises. FDI outflows world-wide picked up in 2010 by around 13% from 2009, to USD 1 282 billion, as compared to the sharp decline in investments in the two previous years (-40% and -12% in 2009 and 2008, respectively). OECD investors accounted for around 80% of global FDI outflows (USD 1 004 billion) representing a 10% increase from 2009 (compared to the decline in 2009 by -44% to USD 912 billion and in 2008 by -15% to USD 1 633 billion). The top three investing countries were the United States (USD 351 billion), Germany (USD 107 billion) and France (USD 84 billion). The United Kingdom, the second largest OECD investor in the pre-crisis period, was in 18th position in 2010. Investors from the European Union as a whole accounted for 34% of global outflows in 2010, at USD 437 billion (34% in 2009 and 51% in 2008).
OECD countries hosted only 53% (USD 650 billion) of global FDI inflows (as compared to 87% of inflows in 2000). The large majority of OECD inflows went to America and Europe. The United States account for 36% (USD 236 billion) of the OECD's FDI inflows in 2010. The United Kingdom, Germany and France in total accounted for 19% (USD 45 billion, USD 46 billion and USD 34 billion, respectively). OECD investors have continued diversifying the destination of their investments, with around 34% of their investments hosted outside the OECD area. The largest non-OECD recipients were China (USD 185 billion), Brazil (USD 48 billion), the Russian Federation (USD 43 billion) and India (USD 25 billion). Indonesia and South Africa received in total USD 15 billion”.
What trends show the gateway to the Gold for investors?
FDI trends to the growing emerging markets ought to be where to keep an eagle eye on simply because they are in route to being where investors will propagate in large droves. Getting there early is key to the “early bird catching the worm”. For example, the emerging markets with the largest growth rates attracting large flows of foreign direct investments currently are the “BRICS” countries – Brazil, the Russian Federation, India, China and South Africa. One of the countries closely trailing and or in line with the BRICS is Nigeria and here are the statistics that should draw smart investors sooner than later:
Nigeria evidenced the largest destination for Total Foreign Direct Investment with $8.92 bn according to the 2012 World Investment report by the United Nations Conference on Trade and Development.
The report released in Geneva noted that inflows into Sub Saharan Africa (where Nigeria is the most populous nation in Africa as a whole) escalated from $29.5bn in 2010 to $36.9bn in 2011. The report further specified that Nigeria received $8.92bn in total foreign direct investment, placing it first in Africa. South Africa was next at $5.81bn during the period under review.
The report stated that Ghana received $3.22bn; Congo, $2.93bn; and Algeria, $2.57bn worth of FDI.
The countries were ranked as the top five African FDI destinations by the United Nations Conference for Trade and Development (UNCTAD).
So where is the gateway to the Gold? What is the fastest way to get to it? A local facilitator to organize access to the market, the incentives provided, the fast track processes through the investment climate and the vehicles available for investment is the gateway to it. Contact our adept team today.