Nigeria, four others account for 50% African external flows

The African Development Bank said Monday that Nigeria, South Africa, Egypt, Morocco and Democratic Republic of Congo accounted for 50 per cent of total external financial flows to Africa.

AfDB projects that total external financial flows to Africa would rise above $203.9bn in 2013, bettering  a record high of $186.3bn in 2012.

The funds come inform of  foreign direct investment, portfolio investment, official development assistance and remittances.

According to a report released by the African development finance bank,  FDIs in Africa are set to rise  by more than 10 per cent in 2013, approaching its 2008 record high, with the fast-growing sub-Saharan region likely to receive the majority of inflows.

AfDB said in that report that investment inflows were set to remain narrowly focused on the major economies of South Africa, Nigeria, Democratic Republic of Congo, Egypt and Morocco, with the rest of the continent still heavily dependent on aid.

'Five countries account for more than 50 per cent of total external flows - Nigeria, South Africa, Egypt, Morocco and DRC. In contrast, half of African countries rely on aid as the largest external source of finance for development needs,' it stated.

The AfDB said Africa's economy would grow by 4.8 per cent in 2013 and 5.3 per cent in 2014, led by West African commodity exporters such as Nigeria, Ghana and Ivory Coast.

But it said a weaker global economy and a prolonged crisis in the euro zone could reduce commodity export earnings, overseas aid, migrant remittances and FDI inflows.

'Africa's economic prospects depend on global and domestic factors, which are highly uncertain. According to estimates, a one percentage point decline of Gross Domestic Product in OECD member countries causes African GDP to decline by about 0.5 per cent and Africa's export earnings by about 10 per cent,' it said.

Total external financial flows to Africa, including FDI, portfolio investment, official development assistance and remittances are projected to reach $203.9bn in 2013, above a record high of $186.3bn in 2012.

Portfolio investment is forecast to increase 30 per cent to $26.2bn in 2013, eclipsing the pre-crisis peak of $22.5bn in 2006. South Africa and Nigeria accounted for 95 per cent of African portfolio flows in 2012, the report said.