(Ecofin Agency) - Foreign direct investment (FDI) in the agricultural sector of developing countries has doubled over the past 15 years. FDIs soared from a yearly average of $7.4bn in 2003-2008, to $15.1bn in 2009-2014, a study conducted by UN’s Food and Agriculture Organization (FAO) revealed.

According to the study, yearly average FDI in Africa’s agriculture increased to $2.5 billion in 2009-2014 against $1.2bn in 2003-2008. Despite the increase, FDI’s level remains quite low due to barriers such as the poor efficiency of logistics networks (roads and ports namely). There is also the low level of productivity which cripples the African agriculture.

However, governments’ efforts to attract FDI, the abundance of natural resources paired with growth rates which exceeded 5% in the past 15 years, amid global fall in prices of commodities, are some factors drawing FDIs in, Commodafrica reveals. By region, West Africa is the one which has attracted the most FDIs with its agro-food industry grabbing close to $7.1bn between 2003 and 2014. Next are East Africa ($5.6bn) and Central Africa ($4.1bn) while North Africa ($3bn) and Southern Africa ($2.4bn) come last.

At the country level, five nations which concentrate a third of Africa’s population grabbed nearly half of agriculture-focused FDI. These are Nigeria (15% of total FDI amount), Cameroon (11%), South Africa (8.5%), Ghana (7.5%) and Egypt (7%). In terms of investors, while the European Union contributed to 58.5% of FDI in Africa’s agro-food sector between 2003 and 2008, it slumped back to 34% with North America, to 2014. As the Union fell of its position, investments from Asian nations rose between 2008 and 2011 and favored an explosion of food products’ prices.

Aaron Akinocho