Mozambique overtakes Nigeria as Africa’s biggest recipient of FDI

Mozambique, the Southern African nation with significant gas reserves, has become the top recipient of FDI inflows into Africa as Nigeria’s stagnant oil and gas industry failed to attract significant investments. The fall in Foreign Direct Investment (FDI) inflows into Nigeria should be a cause for concern to the nation’s economic managers and a wakeup call to legislators to pass the long-stalled Petroleum Industry Bill (PIB).

According to data from the FDI report, a publication of the Financial Times, which focuses on the capital investments announced by foreign investors rather than the number of FDI projects, Africa recorded growth in FDI of 10.76 percent to $51.98 billion in 2013. Mozambique attracted the highest amount of FDI with $6 billion of announced investments, followed by Nigeria with $5.8 billion and South Africa with $5.4 billion.

Mozambique shot up the charts of FDI inflows into Africa as investments pour into its burgeoning oil and gas sector. With reserves estimated at 250 trillion cubic feet, the country has attracted investors such as Eni of Italy and Woodlands, Texas-based Anadarko. Further investments are expected, with the country’s strategic positioning near gas-hungry India and the Far East.

The FDI inflows into Nigeria as a percentage of the size of its economy also pale in comparison to Mozambique. Nigeria attracted 1.13 percent of its GDP as FDI in 2013 compared to 39 percent of GDP for Mozambique. Already, it is projected that Angola may also rival Nigeria as Africa’s largest oil producer by 2016 as it moves ahead on major deep-offshore projects.