EIU forecasts 30% decline in FDI flows into SSA in 2020

The Economist Intelligence Unit (EIU) has issued a forecast, indicating a significant 30 per cent decline in foreign direct investment (FDI) flows into Sub-Saharan Africa for the year 2020. The report highlights that oil and gas producers will bear the brunt of this decrease. Pat Thacker, the editorial director of India, Middle East, and Africa at the Economist Intelligence Unit, recently appeared on CNBC Africa to discuss the implications of this projected decline. During the interview, Thacker shed light on the various factors contributing to this steep decline in FDI flows. He emphasized that the ongoing global economic uncertainty, exacerbated by the COVID-19 pandemic, has played a crucial role in deterring investors from injecting capital into the region. Thacker pointed out that the current situation has caused a ripple effect, impacting sectors such as oil and gas, which have historically been key recipients of FDI in Sub-Saharan Africa. One of the key takeaways from Thacker's analysis is the importance of diversifying the region's investment landscape. As oil and gas producers face a significant setback, exploring other sectors that offer more stability and growth potential becomes imperative. Thacker also noted that countries in Sub-Saharan Africa need to focus on building resilience in their economies to attract alternative forms of investment amidst the challenging global economic climate. Moreover, Thacker highlighted the need for governments across the region to implement policies that foster a conducive environment for foreign investment. Creating a transparent and efficient regulatory framework, coupled with incentives for investors, can help revive FDI flows in Sub-Saharan Africa. Thacker emphasized the importance of proactive measures to restore investor confidence and stimulate economic growth. In conclusion, the EIU's forecast of a 30 per cent decline in FDI flows into Sub-Saharan Africa in 2020 serves as a wakeup call for stakeholders in the region. The need to adapt to changing global economic dynamics and attract diversified forms of investment has never been more critical. By implementing strategic measures and fostering an investor-friendly environment, Sub-Saharan Africa can navigate through these challenging times and emerge stronger in the post-pandemic era.