The African Business Review Jan-Feb 2014 | Page 23

economic sectors and African countries attract larger shares of total FDI, and last but not least, intra-African investment picks up and underpins this diversification trend. First, non-OECD countries increasingly invest in Africa. In 2012 the value of greenfield FDI from non-OECD countries overtook greenfield FDI from OECD countries. Its share increased to 60% of total greenfield FDI to Africa in 2012, compared to only 25% in 2003 (fDi markets, 2013). In contrast, portfolio flows still primarily originate from OECD countries, the United States in particular. In 2012, India, the United Arab Emirates (UAE) and Qatar accounted for over 60% of total FDI from non-OECD countries to Africa. Total value of their investment projects was estimated respectively at USD 7.7 billion, USD 6.2 billion and USD 4.3 billion. The hydrocarbons sector, metals, real estate and communications absorbed over 80% of the investment value from these three countries. Though smaller in value, financial services attracted the largest amount of individual investment projects. The largest investors were Qatar Petroleum (Qatar, hydrocarbons and metals), Essar Group (India, hydrocarbon and metals) and Emaar properties (UAE, real estate). In comparison, the United States and the United Kingdom, the two largest OECD investors in Africa for 2012, announced respectively USD 4.8 billion and USD 3.3 billion investment. Second, new economic sectors attract an increasing share of the new greenfield FDI projects. They include metals, communications, renewable energy, food and tobacco, automotive equipment, construction materials and financial services. Africa’s sustained economic growth of over 5%, improved macro-economic indicators --lower inflation, sustainable debt levels-- and its rising purchasing power offer alternative investment opportunities to natural resources. Yet, with roughly 60% natural resources are likely to continue to attract the majority of greenfield FDI as long as commodity prices are high. And thirdly, intra-African investment