Economic slowdown to hamper FDI inflow into Africa – EABC

By Phyllis MUCHOKI

The projected global economic slowdown from 3.0 percent in 2023 to 2.9 percent in 2024 may potentially dampen exports and foreign direct investment, according to the East African Business Council (EABC).

 

The Global crises of conflict and climate change risks rise of commodity prices for energy & food leading to inflation.

 

Factors such as political and macroeconomic instability, low growth, weak infrastructure, poor governance, inhospitable regulatory environments, and ill-conceived investment promotion strategies, are identified as responsible for the poor FDI record of the region.

 

Foreign trade enables both inflow and outflow of raw materials/finished products between countries. The foreign investment enables the inflow of capital and technologies into a country from abroad.

 

DI and trade are different but related types of transactions that play fundamental roles in the global economy. Foreign direct investment (FDI) and international trade are both drivers of the global economy, facilitating the cross-border transfer of goods, services and capital around the world.

 

According to the Word Economic Outlook (IMF 2023), the East African Community (EAC) bloc is poised for 5.5% Economic Growth in 2024 increasing from 4.9% in 2023, said Mr. John Bosco Kalisa, EABC Executive Director.

 

The overall EAC economic growth surpasses the Sub-Saharan African average growth rate of 4.0%, showcasing the collective economic resilience of the region.

 

“RSM Eastern Africa will provide insights on the economic trajectory of the EAC region to inform businesses decisions,” said Mr. Ashif Kassam, O.G.W, Executive Chairman, RSM Eastern Africa.

 

EABC and Kenya Private Sector Alliance will present Private Sector’s Policy Proposals to the Government in a bid to enhance the overall business environment within the region, for increased intra-EAC trade and investments.