Do Colonial Legacy and Engagement with China Impact the Effectiveness of the European Aid in Promoting Democracy in African States?

Foreign direct investment (FDI) flows to Africa declined to $45 billion from the record set in 2021.They accounted for 3.5 per cent of global FDI.The number of greenfield project announcements rose by 39 per cent to 766.Six of the top 15 greenfield investment megaprojects (those worth more than $10 billion) announced in 2022 were in Africa.o In North Africa, Egypt saw FDI more than double to $11 billion as a result of increased cross-border merger and acquisition (M&A) sales.Announced greenfield projects more than doubled in number, to 161.International project finance deals rose in value by two thirds, to $24 billion.Flows to Morocco decreased slightly, by 6 per cent, to $2.1 billion.o In West Africa, Nigeria saw FDI flows turn negative to -$187 million as a result of equity divestments.Announced greenfield projects, however, rose by 24 per cent to $2 billion.Flows to Senegal remained flat at $2.6 billion.FDI flows to Ghana fell by 39 per cent to $1.5 billion.o In East Africa, flows to Ethiopia decreased by 14 per cent to $3.7 billion; the country remained the second largest FDI recipient on the continent.FDI to Uganda grew by 39 per cent to $1.5 billion on investment in extractive industries.FDI to the United Republic of Tanzania increased by 8 per cent to $1.1 billion.o In Central Africa, FDI in the Democratic Republic of the Congo remained flat at $1.8 billion, with investment sustained by flows to offshore oil fields and mining.o In Southern Africa, flows returned to the five-year average of 2015-2019 after the anomalous peak in 2021 caused by a large corporate reconfiguration in South Africa.FDI in South Africa was $9 billion -well below the 2021 level but double the average of the last decade.Cross-border M&A sales in the country reached $4.8billion from $280 million in 2021.In Zambia, after two years of negative values, FDI rose to $116 million.• Over the past five years, FDI inflows have risen in four of the regional economic groupings on the continent.FDI in the Common Market for Eastern and Southern Africa grew by 14 per cent to $22 billion.Flows rose also in the Southern African Development Community (quadrupling, to $10 billion), the West African Economic and Monetary Union (doubling, to $5.2 billion) and the East African Community (up 9 per cent, to $3.8 billion).• Intraregional investment remained relatively small, despite an increase over the past five years.In 2022, intraregional greenfield project announcements represented 15 per cent of all projects in Africa (2 per cent in terms of value), as compared with 13 per cent (2 per cent in value) in 2017.However, looking at announced projects invested in by only African MNEs, three quarters of their value remained on the continent.• In 2022, the biggest increase in announced greenfield projects was in energy and gas supply (to $120 billion from $24 billion in 2021).Project values in construction and extractive industries also rose, to $24 billion and $21 billion, respectively.The information and communication sector registered the highest number of projects.• International project finance deals targeting Africa showed a decline of 47 per cent in value ($74 billion, down from $140 billion in 2021) but a 15 per cent increase in project numbers, to 157.• European investors remain, by far, the largest holders of FDI stock in Africa, led by the United Kingdom ($60 billion), France ($54 billion) and the Netherlands ($54 billion).