Togo: Foreign direct investments rise for the second consecutive year

Investments
Saturday, 15 June 2019 03:57
Togo: Foreign direct investments rise for the second consecutive year

(Togo First) - In 2018, foreign direct investments (FDIs) to Togo stood at $102 million, according to the World Investment Report released by UNCTAD on June 12, 2019.

This represents a 15% increase compared to the $88.3 million recorded the year before. It is the second consecutive rise in the past two years. The UN institution attributes this performance to the Free-Trade area of Lomé.

“In some cases, governments grant preferential rates to port services, telecommunications, power and water provided to firms established in economic zones, says UNCTAD experts, quoting the law n°2011-018 on the status of Free Industrial Area in Togo.

The report is released on the sidelines of the first Togo-EU forum where Togolese authorities plan on securing part of funds it needs for the national development plan (PND). The document comes also on the same day the parliament adopted a new, more competitive, investment code.

In Togo, inward FDI stock stood at $1.79 billion in 2018, against $450 million ten years before.

FDIs rise in Africa while falling in other parts of the world

FDI flows to Africa, amid a global down trend (-13%), soared 11% to $46 billion, after slumping in 2016 and 2017. This is despite FDIs to major economies such as Nigeria, Egypt and Ethiopia having fallen over the period reviewed. Indeed, other countries, especially South Africa, counterbalanced these poor performances.

“This increase was fostered by the continuous resource-seeking, diversifying some investments and economic recovery in South Africa after many years marked by weak capital entries… A growing demand and rising prices of some basic goods, as well as greater investments in non-extractive sectors, largely drove up FDIs to Africa,” according to UNCTAD experts.

In West Africa, Ghana steals Nigeria’s crown

Last year, FDIs flows to West Africa slumped 15% to $9.6 billion, the lowest since 2006. In Nigeria, fears related to presidential elections paired with the government’s aggressive measures against some multinationals impeded direct investment. Data shows that FDIs to the West African country decreased by 43% in 2018.

Hence, Nigeria was dethroned by Ghana, now the leading receiver of FDIs in West Africa. This, despite foreign direct investments in the country fell by 8% standing at $3 billion. Most of the funds was injected in the gas and minerals industries.

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