23 May 2013

The outward foreign direct investments (FDI) from Qatar fell 29%; while those from the Middle East and Africa (MEA) region grew 9% in 2012, according to fDi Report 2013.

"Qatar saw a decrease in outward FDI in 2012, with FDI projects overseas falling from 38 in 2011 to 27 in 2012," said fDi Intelligence, a specialist division of the Financial Times.

The five leading source countries for FDI all remained the same for 2012, except for Bahrain replacing Qatar in fifth place, it said, highlighting Qatar Petroleum International's $3.6bn oil refinery to be built in Cairo, Egypt.

However, the MEA was the only region across the world to achieve outward FDI expansion in 2012, with the number of overseas projects growing 9.27%, even as capital investment fell by 32.35% and job creation by an estimated 1.79%, it said.

The UAE remained the leading country in the MEA region for outward FDI, increasing the number of FDI projects overseas by 26.44%. Its market share of outward FDI from MEA increased to 33.95% with 220 projects recorded in 2012 compared with 174 projects in 2011.

Saudi Arabia's outward FDI increased by 31.25% and its market share also grew, with 63 FDI projects overseas in 2012 compared with 48 recorded in 2011.

On the inward FDI, the report said the number of FDI projects into the MEA region declined by 11.78% in 2012 to 1,370 projects. Capital investment in the region fell by an estimated 43.31% and job creation by about 23.32%.

"Much of the FDI into the Middle East came from within the region, as firms increasingly aim to become regional players," according to the report.

Qatar reported 54 inward FDI projects in 2012 against 291 in the UAE, 147 in Saudi Arabia, 73 in Oman and 37 in Bahrain.

The number of FDI projects attracted by Oman increased by 48.98% and its market share of inward FDI in the region increased from 3.16% in 2011 to 5.33% in 2012. Egypt and Nigeria also experienced an increase in project numbers by 20% in 2012.

Egypt experienced a large increase in capital investment in the country, rising by 64.67%. South Africa's market share of FDI into the region also increased to more than 10% in 2012.

Of the top 10 countries for inward FDI into the MEA region, Morocco experienced the biggest decline with project numbers falling by 34.25% to 48 projects in 2012.

The widespread political instability and civil unrest in Syria led to a massive 92.86% plunge in the number of inward FDI projects in 2012, the report said.

About inward FDI projects by sector in the MEA region in 2012, it said business and financial services was the leading sector for FDI projects in MEA, accounting for 468 projects.

Although this represents a decrease in project numbers from 2011, the sector increased its market share over the same timeframe, accounting for 34.16% of FDI into the region.

The life sciences sector saw the largest increase in project numbers in MEA in 2012, with FDI projects rising by 34.09%, although the sector's market share of FDI in MEA remains low.

FDI in the transportation, warehouse and storage sector experienced "strong" growth in 2012, with project numbers increasing to 73, a 21.67% increase from 2011.

ICT, engines, turbines and industrial machinery; and real estate, hotels and tourism all achieved growth in FDI projects in MEA in 2012.

The coal, oil and gas sector, which saw a capital investment decrease in 2011, had a decline in FDI projects in 2012, with capital investment falling by 47.46%.

© Gulf Times 2013