Investment Prospects in Africa: Positioning the African Centre for Statistics as a Strategic Provider of Investment Intelligence

Date
Section
OoD
Document Type
Concept Notes
Keywords Description 1. Background and context
Over the past two decades, investment in Africa has been strongly influenced by global cycles (commodity prices, liquidity conditions and risk appetite), with persistent concentration by destination and sector. While investment has supported growth in several economies, it has not consistently reached the scale, stability and composition required to accelerate Africa’s structural transformation, including industrialization, value addition, competitiveness of regional value chains, and resilient infrastructure.

Recent developments between 2023 and 2024 illustrate the need to interpret investment dynamics beyond headline figures. In 2023, FDI inflows to Africa declined by 3 per cent to US$53 billion, amid a challenging global environment and a sharp contraction in international project finance on the continent. In 2024, foreign investment rose by 75 per cent to US$97 billion, increasing Africa’s share of global FDI from about 4 per cent to 6 per cent. UNCTAD, however, underlined that the increase was largely driven by a mega international project finance transaction in Egypt. Excluding that one-off effect, inflows still increased by about 12 per cent, pointing to a broader but more moderate improvement.

Regional dynamics in 2024 further confirm the value of granular analysis. For example, UNCTAD highlighted that Eastern and Southern Africa experienced exceptionally strong inflows, with COMESA economies collectively reaching record highs in 2024. Such patterns matter for investors assessing location strategies, corridor economics, and cross-border value chains, especially in the context of AfCFTA implementation and the renewed emphasis on special economic zones and regional industrial ecosystems.

Beyond levels, the direction and categories of investment remain central to Africa’s agendas. Africa requires more private investment (domestic and foreign) that is productivity-raising, jobs-intensive, supportive of regional value chains under AfCFTA, and aligned with climate and energy transitions. Yet significant gaps persist. The African Development Bank estimates Africa’s infrastructure needs at US$130–170 billion annually, with a large financing gap that constrains competitiveness and transformation.

These gaps are directly linked to Africa’s commitments under Agenda 2063 and the SDGs. Multiple sources continue to cite an SDG financing gap for Africa in the order of US$1.3 trillion per year, reinforcing that public resources alone will not deliver the required scale; private capital mobilization and better investment orientation are essential. Regional challenges, poverty, inequality and climate vulnerability continue to affect livelihoods and increase the urgency of mobilizing investment that supports resilience and inclusion.

Islamic finance is becoming an important source of long-term capital for infrastructure, energy, agribusiness and Small and Medium Enterprises in Africa, supported by the spread of Sukuk markets, Islamic banking and takaful frameworks. Its asset-backed, risk-sharing model aligns well with AfCFTA priorities and infrastructure development, while offering access to new pools of capital from Gulf investors and domestic savings. Deeper analysis of Islamic finance indicators in Africa would strengthen the analysis and support policymakers and investors alike.

At the same time, incumbent and prospective investors continue to face a persistent information and intelligence gap. Investment-relevant data and signals are scattered across many sources, often not comparable, and rarely interpreted through an Africa-centred narrative that supports decision-making. Investors therefore face higher transaction costs due to fragmented access to official data and contextual indicators; limited consolidation of regulatory, operational and risk information; insufficient subnational and corridor-level intelligence to assess feasibility; and limited interpretation of what investment numbers imply for expected returns, constraints and reinvestment prospects. This project responds to these constraints by positioning ECA as a strategic provider of investment intelligence and African narrative analysis across the continent.
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