The United Nations Conference on Trade and Development (UNCTAD) recently released its World Investment Report 2023, which focuses on trends in foreign direct investment (FDI) worldwide, at the regional and country levels and emerging measures to improve its contribution to development.
This year’s edition highlights some areas of progress while identifying policy gaps and bottlenecks in cross-border investment flows. It shows that global flows of foreign direct investment fell by 12% to USD 1.3 trillion in 2022.
The decline was mainly a result of lower volumes of financial flows and transactions in developed countries.
FDI in developing countries increased marginally, although growth was concentrated in a few large emerging economies. Inflows in many smaller developing countries were stagnant, and FDI to the least developed countries (LDCs) declined.
FDI to Zambia
After one year of negative values, FDI to Zambia rose to USD 116 million in 2022.
In 2021 and in 2020, FDI to Zambia reached USD -352 and USD 245 million respectively, from USD 860 million in 2019 and a peak of USD 1.1 billion in 2017.
FDI in Renewable Energies in Africa
In Africa, the economies of South Africa, Egypt, Kenya, Nigeria and Zambia account for about 40% of projects on the continent.
Zambia was the first African country to take part in the Scaling Solar Programme, which includes multiple guarantees and technical support.
Led by the World Bank, this programme aims to develop large solar power plants through auctions. In 2015, the country signed off on two projects representing a total capacity of 88 MW generated through solar photovoltaic power.
In 2019, Zambia awarded 120 MW of capacity for a solar photovoltaic project. This tender achieved a low-price record for Sub-Saharan Africa.
FDI Inflows in 2023
The global environment for international business and cross-border investment remains challenging in 2023.
Geopolitical tensions are still high and recent financial sector turmoil has added to investor uncertainty. UNCTAD expects downward pressure on global FDI to continue in 2023.