COMESA attracts 67pc of Africa FDI as inflows hit $65bn

The Common Market for Eastern and Southern Africa (COMESA) has emerged as a dominant force in attracting foreign direct investment to the African continent, capturing 67 percent of total African FDI inflows during the latest reporting period. According to Heba Salama, Chief Executive of COMESA's Regional Investment Agency, member states have recorded FDI inflows reaching $65 billion, representing a remarkable 154 percent surge despite persistent global economic uncertainty and geopolitical headwinds that have dampened investment sentiment worldwide.

This dramatic acceleration is reshaping the competitive dynamics of African investment corridors and signaling a significant rebalancing of capital flows toward the eastern and southern regions of the continent. For European entrepreneurs and institutional investors accustomed to concentrating their African portfolios in West African hubs like Nigeria and Ghana, COMESA's performance warrants urgent strategic reassessment.

The growth trajectory reflects multiple converging factors. COMESA's 21-member bloc encompasses 630 million people and generates combined GDP exceeding $2.3 trillion, creating a formidable consumer market and production hub. Key members—Kenya, Egypt, Ethiopia, and Zambia—have implemented targeted reforms to streamline business registration, improve currency convertibility, and strengthen intellectual property protections. These institutional improvements have directly addressed longstanding investor pain points that previously discouraged capital allocation to the region.

The investment surge is heavily concentrated in specific sectors. Infrastructure development—particularly transportation networks, port modernization, and energy generation—accounts for approximately 35 percent of recorded flows. Manufacturing and value-added processing represent another 28 percent, driven by rising labor costs in Southeast Asia and supply-chain diversification strategies among European and Asian manufacturers. Agricultural technology, fintech, and telecommunications infrastructure round out the primary investment vectors.

Kenya and Egypt are anchoring this momentum. Kenya's position as East Africa's financial services hub, combined with its relatively mature startup ecosystem and established Special Economic Zones, continues attracting both greenfield investments and acquisition activity. Egypt's strategic geography, Suez Canal proximity, and recent macroeconomic stabilization efforts following IMF programs have repositioned the country as an attractive manufacturing and logistics gateway for European firms serving Middle Eastern and North African markets.

However, European investors must acknowledge inherent risks accompanying this growth narrative. Currency volatility remains acute in several COMESA economies, with the Zambian kwacha, Kenyan shilling, and Egyptian pound all experiencing significant fluctuations against the euro in recent months. Additionally, political instability in certain member states—particularly ongoing tensions affecting Ethiopia's investment climate—creates portfolio concentration risks for investors overweighting the region.

The 154 percent growth figure also warrants contextual scrutiny. Much of this surge reflects year-on-year comparisons against depressed 2022-2023 baselines when global investment retreated sharply. While recovery is genuine, the $65 billion total still represents only 13-15 percent of total annual FDI flowing into developing markets globally.

Nevertheless, COMESA's trajectory presents compelling opportunities for European investors with medium-to-long-term horizons (5-10 years). The bloc's regulatory integration efforts, ongoing trade liberalization, and demographic dividend—with median ages below 20 across most member states—create structural tailwinds unlikely to reverse near-term.