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6 January, 2021updated 02 Nov 2021 15:09

The state of play: FDI in Albania

Albania is one of the poorest countries in Europe, and has enjoyed a small but steady stream of FDI inflows over the past 15 years

By Sofia Karadima

albania-tirana-fdi

Capital Tirana has been the main hub for FDI in Albania. The country is focused on attracting investment compliant with the UN’s SDGs. (Photo by Gent Shkullaku/AFP via Getty Images)

Albania has experienced a steady increase in foreign direct investment (FDI) inflows over the past 15 years. This stands in contrast to its experiences in the early 1990s when the country began its transition from a centralised economy to a free market.

Data from the UN Conference on Trade and Development’s World Investment Report 2020 shows that the country received $1.21bn in FDI inflows in 2019, slightly down from $1.28bn in 2018. However, this represents a significant increase from 2015, when the figure was a mere $265.3m.

When it comes to the number of announced FDI projects in the country. Albania hit a peak in 2005 with 13. It has attracted single-digit numbers since 2013, and in 2017 hosted three projects, followed by six in 2018 and five in 2019.

Albania seeks SDG-compliant FDI

Albania is keen to attract investments that work towards the targets set in the UN’s Sustainable Development Goals (SDGs). In the World Investment Report 2020, UNCTAD states that “specific facilitations of investment in SDG-related sectors are rare”. However, it goes on to state that “the Law on Strategic Investment in Albania provides special benefits for investment in specific sectors, including urban waste management, transport, electronic communications infrastructure and large-scale farms. They include special and assisted procedures, assistive infrastructure and preferential access to land”.

UNCTAD also reveals that while central and eastern European countries are investing in Albania, they are lagging behind those from western Europe. On top of that, Albania is ranked as one of the poorest countries in Europe, according to data from Eurostat. Its data shows that Albania’s GDP is equal to 31% of the EU average.

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