This chart, via Visual Capitalist's Pallavi Rao, tracks foreign direct investment (FDI) flows from the U.S. and China to Africa between 2003 and 2022.

The Changing Nature of Foreign Investment in Africa

Earlier greenfield investment from both the U.S. and China., poured into extractive industries like oil and gas and mining.

While the number of investments were few, their stakes stretched into billions of dollars, like those in, say, copper mines in the DRC.

However, when commodity prices started trending downwards after 2012, capital flows dropped as well. But when U.S. flows fell off entirely, Chinese FDI in Africa began recalibrating.

Their investments started targeting firms in agriculture, light manufacturing, and services. In the last couple of years post-pandemic U.S. flows have also made a comeback, finding footholds in the food and beverage industry.

Meanwhile, there’s been a lot of commentary on China’s debt trap diplomacy in Africa, but there is also evidence that direct investment (the data represented in this graphic, which does not cover loans) does contribute to a country’s growth.

This study found that Chinese investment coincides with “significant and persistent impact on local growth after 6–12 years.”

Growth did come with some footnotes. The same study found that local competitors hired and invested less after Chinese-invested firms came in, but suppliers to the latter expanded operations and improved logistics.

Destinations of U.S. and Chinese FDI in Africa South Africa has been perennially preferred as a destination for foreign investment on the continent.

It features in the top five countries for both U.S. and China’s FDI flows between 2003 and 2022, along with Egypt.

Rank 🇺🇸 U.S. FDI Targets 🇨🇳 Chinese FDI Targets

1 🇪🇬 Egypt 🇿🇦 South Africa

2 🇿🇦 South Africa 🇳🇪 Niger

3 🇱🇾 Libya 🇨🇩 DRC

4 🇬🇶 Equatorial Guinea 🇪🇬 Egypt

5 🇦🇴 Angola 🇨🇮 Côte d'Ivoire

Notably missing from this list are Algeria and Nigeria, Africa’s largest oil producers, that have been a magnet for FDI particularly from America.

It’s very likely that they’re on the list of countries for whom the sensitivity of commercial data has prevented disclosure.

China is playing the long game when it comes to securing copper supply.

Check out Visualizing the Growth of Chinese Copper Miners to see how they’re cornering the market.

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