The Government of the Autonomous Republic of Ajara, including the Ministry of Finance and Economy, has frequently issued optimistic statements regarding foreign direct investment (FDI) in the region in recent years. However, the Ministry has not yet published official data on FDI volumes for 2024. FactCheck published a report last year, presenting FDI figures for Ajara in 2022-2023. We examine the state of FDI in 2024 in this article, comparing it with the indicators from previous years. The data were provided by the National Statistics Office of Georgia.
The FDI situation in Ajara has significantly worsened across all major components, according to data from GeoStat. In Particular, both equity capital and reinvested earnings declined. Ajara received a total FDI volume of USD 42,547,400.
Table 1: Foreign Direct Investment in Ajara, 2023-2024 Quarterly Data (USD Million)
Source: National Statistics Office of Georgia
Table 1 illustrates a sharp decline in FDI in Ajara during the second, third and fourth quarters of 2024. Overall, FDI fell by 29% as compared to 2023. Notably, the largest share of total FDI in 2024 came from reinvested earnings whilst the contribution of equity capital was even lower than in the previous year.
Table 2: Foreign Direct Investment in Ajara by Components of FDI, 2023-2024 (USD Million)
Source: National Statistics Office of Georgia
As illustrated above, whilst the equity component accounted for 27.8% of total FDI in Ajara in 2023, it fell to 19.9% in 2024 – clearly indicating a decline in new investment flows into the region. Meanwhile, the share of reinvestment also fell as compared to the previous year. Specifically, reinvestment made up 117.1% of total FDI in 2023 (a figure exceeding 100% due to debt obligations) but declined to 92.3% in 2024. Whilst reinvestments alone are not inherently problematic, this becomes a negative signal when not accompanied by new equity investments.
Examining FDI by sector reveals that the largest inflows in 2023 were directed toward financial and insurance activities, transport and storage, arts, entertainment and recreation (including gambling), as well as information and communication. By comparison, a significant decline was recorded across several of these sectors in 2024. Nonetheless, there are a few sectors with higher investment volumes than 2023.
Graph 1: Foreign Direct Investment in Ajara by Sectors, 2023-2024 (USD Million)
Source: National Statistics Office of Georgia (includes author’s calculations)
Figure 1 highlights a noticeable decline in FDI in 2024 across several sectors, including arts, entertainment and recreation; transport and storage, financial and insurance activities, real estate-related activities, etc. Conversely, FDI increased in sectors such as accommodation and food services, manufacturing and construction.
The country breakdown of FDI in Ajara also offers valuable insights. In this regard, the distribution of FDI by country is as follows:
Table 3: Foreign Direct Investment in Ajara by Country, 2023-2024 (The table includes only those countries whose FDI exceeded USD 500,000 or demonstrated significant changes during the reporting period)
Source: National Statistics Office of Georgia, Appendix 1, Appendix 2
Note: … – data is confidential, * – preliminary data
An analysis of Table 3 reveals that there was a combined outflow of over USD 30 million in FDI from the United Kingdom, the Netherlands and Russia in 2024. In contrast, these three countries collectively invested USD 45 million in 2023. Investment from Kazakhstan also fell to one-fifth of its 2023 level. Meanwhile, FDI from Turkey rose nearly sevenfold. Notably, Turkey’s share in total FDI reached 99.7%.
The decline in FDI is not unique to Ajara. Georgia as a whole observed a 30% drop in FDI in 2024, decreasing from USD 1.902 billion to USD 1.334 billion
