The UN Conference on Trade and Development (UNCTAD) published on 25 March 2013 a 10-page summary titled "
The Rise of BRICS FDI and Africa." It has attracted some attention because it states that both Malaysia and South Africa as of the end of 2011 had more cumulative FDI stock in Africa than did China. In fact, France headed the list with about $58 billion of cumulative FDI stock in Africa, followed by the United States with about $57 billion and the United Kingdom with about $48 billion.
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| Malaysian Houses of Parliament. Flickr/Wojtek Gurak |
There was a sharp drop to Malaysia with about $19 billion in FDI stock, followed by South Africa with $18 billion, China with $16 billion, and India with $14 billion. South Africa was the leading recipient of Chinese FDI followed by Sudan, Nigeria, Zambia, and Algeria. Indian FDI in Africa was concentrated in Mauritius in order to take advantage of the latter country's offshore financial facilities and favorable tax conditions. As a result, the final destinations of India's investments in Africa often went elsewhere. Some of the FDI coming from other countries also went to Mauritius with the same result. The relatively large FDI figure for Malaysia is, however, still surprising.
As I have commented before on this blog, the official FDI figure for China in Africa significantly understates the actual amount for a variety of reasons. It only represents FDI that it is officially reported to the government of China. Some private Chinese investors do not report FDI flows. China's official numbers miss FDI that passes through Hong Kong, the Cayman Islands and the British Virgin Islands and goes to many countries, including some in Africa. Chinese FDI statistics do not include investment in the financial sector. For example, China's $5.5 billion purchase of 20 percent of Standard Bank of South Africa is presumably not reflected in the cumulative figures for FDI to Africa. China has also made several large investments in companies located in countries outside Africa that have significant holdings in Africa. These investments would not appear in the cumulative figure for Africa.
This is a murky area. Nevertheless, I believe it is correct to conclude that as of the end of 2011 China had more cumulative FDI in Africa than either South Africa or Malaysia but not more than the UK, US, or France.
