Egypt ranked as the world’s top destination for foreign direct investment (FDI) in mega projects in 2022 even as international investors announced more than 16,000 FDI projects globally in 2022, according to fDi Markets, the greenfield investment monitor of the Financial Times.
The global FDI projects represent an estimated value of $1.155 trillion, with more than 2.2 million jobs being created. The pace of FDI in 2022 shows signs of ongoing recovery following the shock effect of the Covid-19 pandemic, with the number of projects increasing 16% and the pledged capital investment rising by 64% from 2021, the report said.
Last year was one characterised by FDI mega projects, with a record number of projects worth at least $1 billion of capital investments.
Egypt attracted more than $96.8 billion in such projects last year, which is close to three times that of its previous record ($34.9 billion in 2016), fDi Markets’ cross-border investment data shows.
Meanwhile, by number of FDI projects, it grew from an average of 3.5 mega projects per year between 2013 and 2021 to 19 mega investments in 2022, ranking Egypt second only to the US.
This influx in capital is directly related to 17 green hydrogen projects, accounting for 97% of Egypt’s total inbound capital investment in 2022.
An impressive 159 large foreign direct investment (FDI) projects worth at least $1 billion were announced globally in 2022, the data shows. This is a record-breaking number of mega projects, as they are known.
While they represent less than 1% of the 16,000 FDI projects announced worldwide in 2022, they make up for half of the $1trillion in capital pledges announced by foreign investors last year, signalling a greater concentration of global FDI in the hands of a limited number of large multinational enterprises (MNEs) with deep pockets and cross-border operations.
The US was a major hotspot for mega investment projects last year. Data from fDi Markets shows that the country attracted approximately 14% of the mega projects last year — 22 deals valued at an estimated $88 billion in capital investment. Factoring in fDi Markets’ figures for inter-state investment,
the US’s overall number of mega projects grows to 39, and adds $74.5 billion in capital
In addition to this, the US was the top source of outbound FDI in 2022, with $207.2 billion recorded across 3,647 projects.
For a fourth year running, the renewable energy sector has attracted the highest total capital investment globally..
The renewable energy industry also accounted for the largest share (35%) of mega projects in 2022 as the sector witnessed unprecedented year-over-year growth. Renewables also received huge capital pledges in green hydrogen and wind energy. Amid higher energy prices and supply constraints after Russia’s war in Ukraine, the number of mega investments in coal, oil and gas grew from four in
2021 to 21 in 2022.
Meanwhile, electronic components (including battery manufacturing); metals (including cathode material production); automotive original equipment manufacturing (including electric vehicle production); and semiconductors accounted for close to a third of announced mega projects.
FDI flow into Middle East
FDI into the Middle East and Africa (MEA) increased in 2022, with the number of announced FDI projects increasing by 54% to 2,131 since 2021. Capital investment into the region also rose by 234% over the period, reaching $261.2 billion.
Regionally, the number of FDI projects destined for the Middle East increased from 870 in 2021 to 1,397 in 2022. This represents a growth of 61% on 2021 and a market share of 8.7% of FDI projects globally.
The number of announced FDI projects into Africa rose from 517 projects in 2021 to 734 in 2022. While project numbers have decreased by 30% since 2019, capital investment into Africa was more than 2.5-times higher in 2022 than it was in 2019.
The UAE has retained its position as the top destination for projects in the region in 2022. A total 879 projects were announced, marking a 71% increase from 2021. The UAE also accounted for 41% of FDI
projects across the MEA and 15% of jobs created in the region.
The number of FDI projects into Egypt rose by more than 150% to 148 in 2022, representing an estimated capital investment of $107 billion. This represents a 41% market share in the MEA region and
ranks it as the top destination country for capital-intensive FDI in the region, and second globally in 2022. This growth is fuelled by several mega projects being announced in renewable hydrogen.
India tops in Asia-Pacific region
Foreign direct investment into the Asia-Pacific (APAC) region grew in 2022, with the region seeing a 65% increase in capital expenditure from 2021, reaching $279.7 billion. In the same period, the number of announced FDI projects increased by more than a third to 3,475.
India was the most attractive destination country in the region by a significant margin, experiencing a 126% increase in the number of announced FDI projects compared to 2021. A total of 994 India-bound projects were recorded in 2022 -- 45% higher than its prepandemic performance in 2019. Capital expenditure into India also increased from $16.1 billion in 2021 to $75.8 billion in 2022, accounting for 27% of the total recorded investment in the APAC region.
Inbound FDI for China declined further in 2022, with decreases in the number of announced FDI projects numbers (24%), capital expenditure (44%) and job creation (59%). Compared to 2019, the
number of projects into China last year was down 60% and capital investment was down 68%. - TradeArabia News Service