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GLOBALOUTLOOK PERFORMANCEINDEX


Togostormsto the topin greenfield FDIperformance


NAOMI DAVIES REPORTS ON THE COUNTRIES PUNCHING ABOVE THEIR WEIGHT WHEN IT COMES TO GENERATING FOREIGN INVESTMENT


T


ogo’s strong performance in 2019 gained the west African country the crown as the


world’s best performing country rel- ative to its sizewhen it comes to attracting FDI. Togo topped the annual reading


of the Greenfield Performance Index as a newentrant (only countries that attract 10 or more FDI projects make the ranking) with a score of 10.8. It is closely followed by Rwanda (10.6) and Costa Rica (9.1) in second and third place respectively. Last year’snumber one, Serbia,


fell to fifth place after thenumber of inward FDI projects it received dropped by more than a third: 78 in 2019, compared to 105 in 2018. Of the 101 locations analysed in


the 2020 Greenfield Performance Index, 75 had an index score greater than 1,while 26 had a score of 1 or less. A score of 1 indicates a country’s share of global inward greenfield FDI matches its relative share of globalGDP, a score greater than 1 indicates a larger share than indi- cated by itsGDP and a score of less than 1 indicates a smaller share. Togo is thus attracting more than 10 times the amount of greenfield FDI that might be expected given the size of its economy. At the other end of the spectrum,


Japan and China scored 0.22 and 0.30 respectively. They stand out as the lowest performing countries given the size of their economies, and also for their typical hard and soft barriers to foreign investment. Bangladesh (0.31), Iraq (0.31) and South Korea (0.36) are also attracting much less FDI in proportion to the


32


Top spot: Togo’s 2019 performance has earned it the greenfield investment performance laurels


size of their economies. Togo, one of the smallest coun-


tries in Africa, attracted 11 FDI pro- jects in 2019 – its best performance since fDi Markets began recording data in 2003. Financial services, build- ingmaterials and business services are the country’s leading FDI sectors and accounted for almost half (46.2%) of its inward FDI projects in 2019. In November 2019, Nigeria-based Dangote Group, the biggest conglom- erate inwest Africa, announced plans to establish anew$2bn phosphate fer- tiliser processing facility in Togo. This will involve the creation of 2500 jobs. Rwanda is another new entrant


to this year’s index. The east African country recorded 20 FDI projects in 2019, its peak year since 2009. Business services was the country’s leading FDI sector in 2019, represent- ing 35% of total inward FDI. Costa Rica jumped from13th in


the previous study to third in the 2020 index, improving its score by 4.36 points. The country experienced modest GDP growth from2018 to 2019 (+0.92%), but almost doubled its inward FDI projects. Its jumpfrom 53 in 2018 to 103 in 2019 helped it achieve the largest score of any coun- try globally receivingmore than 100 inbound projects. Of the world’s 10 largest econo-


mies, five had an index score above 1 – the UK (2.51), France (1.4), Germany (1.3), India (1.21) and Canada (1.08). Five of the top 10 also had a higher score in 2020 index compared to their previous score, including the US, the UK and Canada. The Greenfield Performance


Index uses a methodology devised by Unctad for overall FDI, and applies it to only greenfield FDI – excluding M&A, intracompany loans and other forms of cross-border investment.■


www.fDiIntelligence.com August/September 2020


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