Intra-African Investment Predominately in Services Sectors

According to Economic Development in Africa Report 2013, available data indicate that intra-African investment is becoming important in several African countries. For example, between 2008 and 2010, Botswana, Malawi, Nigeria, Uganda and the United Republic of Tanzania received more than 20 per cent of their total inward stock of FDI from other African countries. Furthermore, it is estimated that intra-African FDI in new projects grew at an annual compound rate of 23 per cent between 2003 and 2011. A growing share of intra-African FDI goes to the services sector. 

Between 2003 and 2011, about 68 per cent of the 673 deals relating to intra-African greenfield investments went to services, compared with 28 per cent for manufacturing and 4 per cent for the primary sector. Within services, about 70 per cent of the deals were in finance. To the extent that manufacturing firms rely on business services, the growth of the service sector is likely to have a positive impact on the development of productive capacity and therefore the performance of manufacturing firms and intra-African trade.