Nigeria and South Africa accounted for 95 percent of total portfolio investment of $20.15 billion recorded in Africa in 2012, the African Development Bank reported in its annual African Economic Outlook.
The report said total external financial flows to Africa, including foreign direct investment, portfolio investment, official development assistance and remittances are projected to reach $203.9 billion in 2013, above the record high of $186.3 billion set in 2012, according to a article in All Africa.
Portfolio investments are expected to increase by 30 percent to $26.2 billion in 2013, eclipsing the pre-economic crisis peak of $22.5 billion in 2006.
The fast-growing Sub-Saharan Africa will likely receive the majority of foreign direct investment to Africa, set to rise by more than 10 percent in 2013, approaching its 2008 record high.
Foreign direct investment is forecast to reach $56.6 billion this year, up from $49.7 billion last year and short of $57.8 billion recorded in 2008.
“Almost the entire projected increase in foreign direct investment to Africa is expected to be in sub-Saharan Africa, while in 2012 Northern Africa absorbed half the increase,” according to the bank. “This confirms sub-Saharan Africa’s economic dynamism as well as the hesitance of investors over political developments in North Africa, particularly in Egypt.”
Five countries account for more than 50 percent of total external flows: Nigeria, South Africa, Egypt, Morocco and Democratic Republic of Congo, African Development Bank reported in All Africa. “In contrast, half of African countries rely on aid as the largest external source of finance for development needs.”