Estimates released last week by the United Nations Conference on Trade and Development (UNCTAD) also indicate that of the total FDI inflows to the local economy, US$148 million (P1.3 billion) were to greenfield investments. The balance is attributable to merger and acquisition activities as well as expansions.Botswana's estimated FDI inflows were classified as being in the middle of a group of developing landlocked countries which were topped by Kazakhstan. The Central Asia state attracted US$14.1 billion (P121 billion) in FDI inflows last year mainly to its oil and gas industry.
The landlocked developing countries category in which UNCTAD groups Botswana, generally has a disadvantage in attracting FDI, as investors prefer more developed seacoast markets with more developed economies.Within the southern African region, UNCTAD data shows that Botswana's FDI inflows last year were towards the lower end of the 10 surveyed countries. At the top was Mozambique which attracted US$5.2 billion (P45 billion) in FDI, mainly to its gas and coal projects, followed by South Africa with US$4.6 billion (P39.3 billion).Botswana's US$293 million (P2.5 billion) in FDI inflows was only larger than Swaziland, Malawi, Lesotho and Angola, which recorded a massive negative FDI inflow of US$6.9 billion (P59 billion). Negative FDI inflows point to disinvestment by foreign-owned entities as opposed to investment.All southern African countries, except Mozambique and Zimbabwe, recorded year-on-year decreases in FDI inflows, with Angola and South Africa suffering the biggest drops. "FDI flows to southern Africa plunged from $8.7 billion (P75 billion) in 2011 to $5.4 billion (P46.2 billion) in 2012," UNCTAD researchers said."The decreases in Angola and South Africa were partly offset by the near doubling of flows to Mozambique, where the appeal of huge offshore gas deposits helped to attract investor interest."UNCTAD data also indicates that Africa was the only region that saw FDI flows rise in 2012, driven largely by investments in the extractive sector. While the UN agency did not specify to which sectors Botswana's FDI inflows were directed, previous research has shown that mining generally dwarfs other sectors due to its traditional dominance as well as its need for high capital investments.
