The UAE has been ranked first in the Arab world and 19th globally for its ability to attract foreign direct investment (FDI) inflows by the World Investment Report 2022 issued by the United Nations Conference on Trade and Development (UNCTAD). The UAE also emerged 17th globally in terms of FDI outflows that totaled $22.5 billion in 2021, a 19% growth compared to the year 2020.
Mr. Abdullah bin Touq Al Marri, the Minister of Economy, said that the report’s findings and indicators confirmed that the UAE was on the right track towards achieving its ambitious goals of strengthening its national economy and increasing its global competitiveness, with the support and directives of the wise leadership and in line with the directives and principles of the UAE Centennial 2071.
According to the report, which compares FDI performance of countries in 2021 with that of 2020, the UAE attracted $20,7 billion in FDI in 2021. This is an increase of 4 percent from 2020. As a result, it became the first Arab country to receive 40 percent of the total FDI received by Arab countries, which totals $52.9 billion.
UAE attracted foreign investment to a wide range of sectors and economic activities, including oil, gas and energy, which accounted for 59 percent of the total. The information technology and communications sector received 10% of all inward foreign direct investment, followed by banking, finance, and insurance (7%) real estate, management and development (7%) health care (6%) and manufacturing (5%).
In 2021, many sectors experienced fluctuating FDI growth compared to 2020. Manufacturing achieved the highest growth rate at 13 percent. This was followed by the health sector at nine percent, real estate at four percent, energy at three percent, and services at two percent.
The UAE is ranked number one in West Asia as it accounts for 37 percent of the region’s total investment inflows, which amount to $55.5 billion. As for MENA, the country accounted for 31% of overall foreign investment in the region at $66.6 billion. In the report, the total amount of FDI to the country reached $171.6 billion by the end of 2021, an increase of 14 percent from $151 billion in 2020.
Moreover, the UAE ranks fifth internationally in terms of new foreign direct investment projects in 2021, with 535 announced projects. This represents a 39 percent increase over 384 projects in 2020. A $633 million solar power project in Dubai in 2021 has been announced jointly by German DHL Global Forwarding and French Total, according to the report.
According to the article, the UAE is among the top six economies in Asia that receive high levels of investment, along with China, Hong Kong, Singapore, India, and Indonesia. By the end of 2021, FDI outflows from the country exceeded $215 billion, an increase of 11.7% from $192.5 billion in 2020.