African countries are doing well in the Greenfield FDI Performance Index, which measures the weight of FDI in relation to the economic size of countries. In this game, Togo and Rwanda are at the top of the most attractive countries in 2019.
Togo tops the 2020 Greenfield FDI Performance ranking which measures FDI inflows (Foreign Direct Investments) and assesses their relative weight in the economy.
The West African country attracted 11 major foreign investment projects, a strong performance given its size. With regard to global FDI, a theoretical uniform distribution would have given only one investment in Togo, which is therefore more than ten times better than the average.
The indicator published by FDI Intelligence assigns a score of 10.8 points to Togo, which is slightly ahead of another African country, Rwanda (10.6 points).
Only the countries that have attracted at least ten large-scale projects are included in this ranking, where we also find Mozambique (4th, 9 points), Senegal (6th, 6.6 pts), Zimbabwe (8th, 5,9 pts) in the top ten.
Costa Rica (Central America) climbs to third place (9.1 points). In 2019, the ranking was dominated by Serbia, this time falling back to fifth place after a 30% drop in its inward FDI.
Of the 101 countries analyzed in the Greenfield 2020 Performance Index, 75 had an index score greater than 1, while 26 had a score of 1 or less.
A score of 1 indicates that a country’s share in global FDI corresponds to its relative share of global GDP, a score greater than 1 indicates a share higher than that indicated by its GDP, and a score less than 1 indicates a share smaller. This is why FDI Intelligence considers that Togo thus attracts more than 10 times the amount of new FDI than one might expect, given the size of its economy.
Note that at the other end of the spectrum, Japan and China scored 0.22 and 0.30 points respectively. These two giants stand out as the worst performing countries given the size of their economies and their closure to foreign investment.
Togo, one of the smallest countries in Africa, therefore attracted 11 FDI projects in 2019, its best performance since FDI Markets started recording data in 2003. Financial services, construction materials and Business services are the country’s main foreign investment sectors and accounted for almost half (46.2%) of its inward FDI projects in 2019.
In November 2019, the Nigerian group Dangote announced plans to create a new phosphate fertilizer processing plant, spending $2 billion. This project leads to the creation of 2,500 jobs.
Adjustment of reforms!
This performance is all the more remarkable given that the year 2019 marked a decline in foreign investment in Africa, in particular West Africa (-21%), according to the World Investment Report established by the Unuced.
It is true that the UN institution essentially attributed this decline to the new rules in force in Nigeria, in the hydrocarbon sector. Togo, for its part, continues to benefit in particular from the success of the Lomé free zone.
Rwanda is another new entrant to this year’s index. The East African country recorded twenty FDI projects in 2019, its record year since 2009. Business services were the country’s top foreign investment sector in 2019, accounting for 35% of total inward FDI. .
Note that out of the ten largest economies in the world, five had an index greater than 1: the United Kingdom (2.51), France (1.4), Germany (1.3), India (1.21) and Canada (1.08).
The Greenfield performance index uses a methodology designed by Unctad for all FDI and only applies it to new FDI, excluding mergers and acquisitions, intra-company loans and other forms of investment. cross-border investment.
This publication comes as the Ministry of Economy and Finance forecasts a 4.2 point growth loss for Togo in 2020, due to the Covid-19 pandemic. The 19th “Reform Review” made it possible to adjust the priorities for a country which intends to retain its status as a great reformer.
According to Minister Sani Yaya, “the new policy will revolve around the creation of growth poles, industrial processing units of our raw materials, particularly in the agricultural and industrial sector to develop value chains and create more jobs”.
Reference: https://magazinedelafrique.com/african-business/le-continent-attire-les-investissements/
