U.S. foreign direct investments in Africa 2023

After a peak in 2014, foreign direct investment (FDI) in Africa from the United States dropped to 44.81 billion U.S. dollars in 2020, but picked up again throughout the following years, reaching 56.29 in 2023. Africa receives lower FDI inflows than any other region.

What is FDI?

FDI is when investors from one country, in this case the United States, invest in firms that are based abroad. Often investors do this to earn higher returns due to a risk premium. They will seek markets where default risk is higher. If their investments mature, the returns are higher than they would be in a place with less risk.

Effects of FDI

The United States has higher FDI outflows than any other country, in large part because its economy is so large. In addition to seeking higher returns, some investors are interested in cultivating international relationships. This could be an effort to expand the consumer base, shore up supply chains, or for humanitarian or cultural reasons. For the receiving country, FDI means an increase in capital. For emerging markets, this can be critical. When the number of banks per country is low, capital access becomes difficult.

Foreign direct investment position of the United States in Africa from 2000 to 2023 (in billion U.S. dollars, on a historical-cost basis)

Characteristic	Direct investments in billion U.S. dollars
2023	56.29
2022	48.9
2021	46.99
2020	43.81
2019	45.4
2018	48.07
2017	50.4
2016	49.93
2015	52
2014	69.03
2013	60.88
2012	55.85
2011	57
2010	54.82
2009	43.94
2008	36.75
2007	32.61
2006	28.16
2005	22.76
2004	20.36
2003	19.84
2002	16.04
2001	15.57
2000	11.89

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Release date

August 2024

More information

Region

United States

Survey time period

2000 to 2023

Supplementary notes

Values have been rounded.

In accounting, historical cost is the original monetary value of an economic item. Historical cost is based on the stable measuring unit assumption. In some circumstances, assets and liabilities may be shown at their historical cost, as if there had been no change in value since the date of acquisition.
U.S. direct investment abroad is defined as ownership by a U.S. investor of at least 10 percent of a foreign business. The direct investor is known as a U.S. parent, and the U.S.-owned foreign business is known as a foreign affiliate. International transactions statistics cover the foreign affiliates’ transactions with their U.S. parents, so these statistics focus on the U.S. parent’s share, or interest, in its affiliates rather than on the affiliates’ overall size or level of operations. The major items include capital flows, which measure the funds that U.S. parents provide to their foreign affiliates, and income, which measures the return on those funds. Direct investment position statistics are stocks and are cumulative; they measure the total outstanding level of U.S. direct investment abroad at year end.

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