Mumbai, October 12, 2018: Exim Bank’s study analyses the current investment scenario in the West African region and the opportunities that the region presents for Indian businesses. The study highlights the region’s significant economic progress in the last few decades and the continuous implementation of reforms which have improved the prospects of doing business in the region.
Despite West Africa’s enormous investment potential, its integration into the global economy remain low mainly due to cross border constraints. In accordance with global investment trends witnessed in 2017, FDI into West Africa fell by 10.9 percent to US$ 11.3 billion in 2017 compared to US$ 12.7 billion in 2016, mainly due to decline in FDI to Nigeria and Ghana, receiving 27.1 percent of total FDI inflows into Africa. FDI prospects are expected to be relatively favourable for the region in 2018, benefitting from stronger commodity prices and improvements in infrastructure following high public investment. Nigeria, Ghana and Côte d’Ivoire have been the major drivers of foreign investment inflows during 2008 to 2017. Among the sectors, coal, oil and natural gas remained the biggest capital investment attracting sector, followed by metals, communications, and alternative/ renewable energy. Also, the top investors in the region include Canada, UK, South Africa, USA, China and France.
The study identifies that during 2008 to 2017, India invested US$ 6.7 billion in 70 FDI projects in West Africa, creating over 21,000 jobs in the countries in the region. The region accounted for 18.2 percent of total Indian FDI in Africa. The sectoral composition of these investments have been tilted towards chemicals sector, followed by communications, and coal, oil and natural gas sectors. The Indian investments are concentrated in a few West African countries likeNigeria, Ghana, Senegal, Liberia, Sierra Leone, Burkina Faso, Niger and Côte d’Ivoire. The study suggests that Indian investors could seek out other potential countries in the region to diversify their investment portfolios, in line with the potential identified.
The study recognizes that increased FDI flows could act as a strong external growth driver for the region. The investment promotion agencies of the countries in the West African region have put forward their priority sectors, taking into account the capability of each country. The study analyses the potential for Indian investments in the West African region and finds out that essentially, the sectors like agriculture and agro-processing, mining, manufacturing, power, energy, including hydrocarbons and renewables, and transport and construction, offers considerable opportunities to invest. The recent emergence of the services sector as the dominant sector in most West African countries, offers huge opportunities in areas of healthcare, tourism, financial services, education and skill development.
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