Foreign direct investment (FDI) inflows into Africa fell by 50% in 2020, with the continent recording its worst economic downturns in 50 years, according to Ernst & Young's new report on African Attractiveness.

The broader services sector, including business services, telecommunications, media and technology, financial services and consumption, attracted 72% of Africa's FDI. The extractive sector – mining, oil and gas, on the other hand – accounted for only 4% of FDI inflows in 2020. In essence, this does not mean that Africa is not yet strongly commodity dependent. This is one of the main findings, as revealed by the report, which notes that FDI in Africa fell by 50% last year, the hardest hit region in the world.

The report also states that “Africa's overall GDP contracted by 2.4% in 2020, but this less than the 3.6% contraction in overall world GDP”. A poor performance attributed to the Covid-19 pandemic which caused numerous business disruptions in all sectors and industries.

Also notable, the report notes, FDI is moving away from extractive industries, “as the increased global focus on environmental sustainability necessitates a sea change in the business world. This addresses the transition to green energy and related concerns that are part of corporate adoption of GSE – environmental, social and governance issues”.