EY, the international financial services consultancy, has ranked Uganda in the top 10 for foreign direct investment (FDI) performance in Africa during 2023 in terms of attracting capital, starting new projects, and creating jobs.
Key regions like North and West Africa, along with leading countries such as Egypt, South Africa, and Nigeria, displayed strong investment appeal. For the eastern region, Ethiopia emerged highest in fourth position behind Egypt, South Africa, and Morocco, while Tanzania and Uganda came in eighth and ninth respectively. Others in the top 10 are Nigeria, Ghana, Mauritania and Zambia.
The 2024 EY Africa Attractiveness Report published last week, shows growth across several key indicators, with the resurgence marking a recovery from the pandemic low in 2021. Uganda recorded 19 new projects totaling $1.5 billion in capital and the creation of 4300 new jobs.
Ranked first, Egypt was the recipient of $40.1 billion in capital, spread over 133 projects and 58,400 jobs. Ethiopia launched 83 projects worth $7.8 billion and created 11,700 jobs while Tanzania saw new investments totaling $1.7 billion, opening the way for employment of 4,900 people.
In sum, FDI led to the creation of 205,000 jobs across Africa in 2023. The total capital investment reached $164 billion a 138% increase over the pre-pandemic levels of 2019, while the number of projects, at 798, rose by 9% from the previous year.
The continent’s 2023 FDI doubled since then and showed a seven percent year-on-year increase, driven by significant investments in renewable energy, food and beverage, and business services sectors. China, the UAE, and the United States – emerged as leaders in job creation, capital investment.
Key regional dynamics highlight Africa’s appeal to investors seeking both market and investment growth opportunities. North Africa led the continent across major foreign direct investment metrics. These include job creation and capital investment, with Egypt achieving Africa’s highest overall FDI score. Sub-Saharan Africa (SSA) displayed strong growth in new projects, led by South Africa, while Kenya and Nigeria were also in the top five.
Intra-regional investment saw African countries contributing to 14% of total projects within the continent. South Africa, Kenya, and Nigeria led these investments. The African Continental Free Trade Agreement (AfCFTA) is intended to foster cross-border trade and economic integration, further boosting intra-African investment.
While intra-Africa FDI accounts for only five percent of jobs and less than three percent of capital, it holds significant potential to strengthen local economies.
North Africa led the continent in job creation, capital investment, and project count, with Egypt emerging as the top performer. The country accounted for over 25% of all FDI-related jobs across Africa, and despite a decline from $107 billion in 2022 to $40 billion, was again the continent’s leader in capital inflows.
Mauritania attracted the continent’s second-highest capital investment in 2023, driven by a $34 billion UAE-funded green hydrogen project. This landmark investment could establish Mauritania as a renewable energy hub.
South Africa led in new project count, affirming its appeal across multiple sectors, including business services, technology, and manufacturing. Alongside Egypt and Morocco, South Africa accounted for nearly 47% of all such projects across Africa, underscoring the appeal of these economies for investors seeking market scale and diversity.
West Africa recorded significant growth in renewable energy FDI and job creation. Nigeria played a leading role in job creation, particularly in sectors such as food and beverage. Traditional sectors like food and beverage supported job growth, while renewable energy projects positioned West Africa as an emerging player in green investments.
China led in FDI-related job creation with a 270% increase over the 2022 level, accounting for the highest job creation rate among all source countries. Over the past five years, Chinese investment has generated over 102,000 jobs in Africa, representing 15% of all FDI-related jobs on the continent.
The UAE was the top capital investor in Africa, contributing $44 billion in capital investment – nearly equaling the combined investments of the second and third-largest providers of capital (the UK and China, respectively). This substantial capital inflow targeted the renewable energy sector, highlighted by the Mauritania green hydrogen project. The UAE’s investment establishes it as a major player in Africa’s green transition.
The United States led in the number of projects, with 90 across Africa, marking its influence in high-growth sectors like software and IT services and business services and communications.
Although the US was not a leading provider of capital in 2023, it increased investment levels from $7 billion to $9 billion, and its broad sectoral focus reinforces its active role in Africa’s economic landscape. The UK achieved the highest overall FDI score due to its balanced contributions across jobs, capital, and projects, reflecting its diversified approach to investment in Africa.
