How the Middle East and Africa attracted The Most Foreign Direct Investment (FDI) Globally.

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According to a report by Investment Monitor, the Middle East and Africa (MEA) region attracted the largest gain in foreign direct investment (FDI) market share in 2022, making it the fastest-growing region for FDI since 2019. Despite ongoing challenges, the MEA region has strong opportunities for securing an even larger share of FDI as investors prioritize sustainable investment. The report shows that both regions witnessed strong increases in FDI in 2022, with Africa increasing by 17.7% and the Middle East increasing by 13.6%.

Foreign Direct Investment (FDI)Half of all MEA countries experienced an increase in FDI projects in 2022, with investments from over 100 countries – of which 71 are outside MEA –invested in the Middle East alone. The top five countries by the number of Greenfield FDI projects are the UAE, Saudi Arabia, South Africa, Egypt, and Qatar. The Middle East and Africa (MEA) has become the fastest-growing region for foreign direct investment (FDI) since 2019, with digitalization and green energy at the top of investors’ priorities. According to Investment Monitor’s FDI Report 2023, the MEA region has strong opportunities for securing an even larger share of FDI as investors eye sustainable investment.

The report showed that the Middle East saw the largest spike in FDI post-pandemic in 2021, more than double compared to the previous year, while Africa recorded a sturdy growth of 37.8%. Interestingly, despite losing global market share, Europe, Asia, and North America continue to be the top three regional markets for FDI.
The UAE, Saudi Arabia, South Africa, Egypt, and Qatar were identified as the top five countries by the number of Greenfield FDI projects. Egypt has attracted FDI projects through its renewable programs, while Qatar has attracted FDI as the FIFA World Cup brought the spotlight on the country. The Kingdom of Saudi Arabia has benefited from opening its borders to tourism.

Investors are looking for political stability, favourable incentives, and the availability of talent in the region. Digitalization, artificial intelligence (AI), and energy transition were highlighted as key areas of priority. The report highlighted that there is a concentration of FDI in capital cities, and IPAs should explore bringing investors into different parts of the country.

(Reporting by Omnia Al Desoukie; editing by Brinda Darasha)

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