1 - Attracting Foreign Direct Investment for Growth and Development in sub-Saharan Africa: Policy Options and Strategic Alternatives
Africa Development,
Vol. 32 No. 2 (2007): Africa Development
Abstract
Foreign Direct Investment (FDI) plays an important role in fostering economic growth and development in developing countries. While FDI is known to bring to the latter much needed capital for their growth and development efforts, it also brings with it skills and new technology. For most countries in sub-Saharan Africa, whose economies have recently recovered from a long period of stagna- tion, FDI inflows are needed to accelerate growth, and development. Several countries in the region registered impressive growth rates in the 1990s, with some attaining and sustaining double-digit growth rates in most recent times. However, if sub-Saharan Africa is to accelerate its growth rates to enable it move the majority of its peoples out of poverty, it must attract more FDI. Efforts so far have been encouraging. However, when compared to countries in South East Asia such as Singapore, Malaysia, Thailand and China, FDI inflows into sub- Saharan Africa pale. What are the causes for such low FDI inflows to this re- gion? How can sub-Saharan Africa attract more FDI for its growth and develop- ment efforts? What policy options are available to these countries? What strategic alternatives can sub-Saharan countries adopt to increase FDI inflows? What role can multilateral and bilateral organisations play in this effort? This paper will address these questions by examining current FDI flows into sub-Saharan Africa and examine ways through which the sub-region can further attract much needed FDI to enable it to attain sustainable growth and development.
Keywords
Download Citation
Endnote/Zotero/Mendeley (RIS)BibTeX
- Abdulai, D., 2004, Can Malaysia Transit into the K-Economy?: Dynamic Challenges, Tough Choices and the Next Phase, Kuala Lumpur: Pelanduk Publications.
- Abdulai, D. N., 2001, African Renaissance: Challenges, Solutions and the Road Ahead, London: ASEAN Academic Press.
- Abdulai, ed., D. N., 2001, Malaysia and the K-Economy: Challenges, Solutions and the Road Ahead, Kuala Lumpur: Pelanduk Publications.
- Aggarwal, R., 1984, ‘The Strategic Challenge of Third World Multinationals: A New Stage of the Product Life Cycle of Multinationals?’, Advances in International Comparative Management, 1: 103-22.
- Arndt, H. W., 1974, ‘Professor Kojima on the Macroeconomics of Foreign Direct Investment’, Hitotsubashi Journal of Economics, 15 (2): 26-35.
- Akinkugbe, O. ‘ Flow of Foreign irect Investment to Hitherto Neglected Developing Countries’. Discussion Paper 2003/02. UNU/Wider.
- Becker, G., S., 1993, Human capital: A Theoretical and Empirical Analysis with Special Reference to Education, Chicago: University of Chicago Press, p. 24.
- Berlot, T. J. and Dale, R. W., 1992, Programs in Industrial Countries to Promote Foreign Direct Investment in Developing Countries, Washington, DC: World Bank.
- Bhattacharya, A., Peter, M. and Sunil, S., 1997, ‘How Can Sub-Saharan Africa Attract More Private Capital Inflows?’, Finance and Development, 34 (2): 3-6.
- Calamitsis, E. A., 1999, ‘Adjustment and Growth in Sub-Saharan Africa: The Unfinished Agenda’, Finance and Development, 36 (1): 6-9.
- Dagash, I. A., 1998, ‘A Critical view on how the European Media Is Covering Africa’, Paper presented at the conference on Reporting Africa: Return to the Agenda, Cardiff, Wales.
- Dunning, J. H., 1993, Multinational Enterprise and the Global Economy, London: Addison Wesley.
- Economist, 1995, ‘Out of Africa, a Smooth Ride’, 10 June.
- French, H., 1997, ‘Africa Takes Care of Crises on its Own Once Again’, New York Times, 9 June.
- Gary, H. P., 1982, ‘Macroeconomic Theories of Foreign Direct Investment: An Assessment’, in Alan M. Rugman, ed., New Theories of the Multinational Enterprise, London: Croom Helm.
- Hymer, S. H., 1976, The International Operations of National Firms: A Study of Direct Foreign Investment, Cambridge, Mass: MIT Press.
- IMF, 1999, ‘Growth in Sub-Saharan Africa: Performance, Impediments and Policy Requirements’, World Economic Outlook, p. 141.
- Iverson, C., 1953, Aspects of the Theory of International Capital Movements, London: Oxford University Press.
- Kojima, K. and Terutomo, 1984, ‘Micro and Macro-economic Models of Direct Foreign Investment: towards a synthesis’, Hitotsubashi Journal of Economics, 25 (2), pp. 1-20.
- Kojima, K., 1982, ‘Macroeconomic Versus International Business Approach to Direct Foreign Investment’, Hitotsubashi Journal of Economics, Vol. 23 (2), pp. 1-19.
- Lall, S. and N. S. Siddharthan, 1982, ‘The Monopolistic Advantages of Multinationals: Lessons from Foreign Investment in the U.S.’, Economic Journal, 92 (367), pp. 668-83.
- Lall, S., 1980, ‘Monopolistic Advantages and Foreign Involvement by U.S. Manufacturing Industry’, Oxford Economic Papers, 32, pp. 102-22.
- Lee, C. H., 1984, ‘On Japanese Microelectronics Theories of Direct Foreign Investment’, Economic Development and Cultural Change, 32 (4) 713-23.
- Lewis, W. A., 1978, The Evolution of the International Economic Order, Princeton, New Jersey: Princeton University Press.
- Lippman, T., 1996, ‘Foreign Aid by U.S. Declines’, International Herald Tribune, 19 June.
- OECD/AfDB, 2004, ‘African Economic Outlook 2003/04’, www.oecd.org/dev/ africanoutlook.
- OECD, 1995, Taxation and FDI: The Experience of Economies in Transition, Paris: OECD.
- Ouattara, A. D., 1999, ‘Africa: An Agenda for the 21st Century’, Finance and Development, 36 (1), pp. 2-5.
- Tillet, C., 1996, ‘Foreign Investment: Targeting and Promotional Strategies’, London: Commonwealth Secretariat, Occasional paper No.2, Mimeo.
- Uganda Investment Authority, 1998, End of Year Report 1997, Kampala: Uganda Investment Authority.
- United Nations Economic Commission for Africa, 2003, Economic Report on Africa, Addis Ababa, Ethiopia: UNECA.
- United Nations Economic Commission for Africa, 2001, Transforming Africa’s Economies: Overview, Addis Ababa, Ethiopia: UNECA, pp. 1-3.
- UNCTAD, 2005, Economic Development in Africa: Rethinking the Role of Foreign Direct Investment, New York and Geneva: United Nations.
- UNCTAD, 2002, World Investment Report, New York and Geneva: United Nations UNCTAD, 2001, ‘Promoting Linkages’, World Investment Report, New York: and Geneva: United Nations.
- UNCTAD, 2000, Capital Flows and Growth in Africa, New York and Geneva: United Nations.
- UNCTAD, 1999, Foreign Direct Investment in Africa: Performance and Potential, New York: and Geneva: United Nations.
- Wall Street Journal Europe, 1999, ‘Nigeria’s President-Elect Aims to Uproot Corruption, Boost Foreign Investment’, 19 March.
References
Abdulai, D., 2004, Can Malaysia Transit into the K-Economy?: Dynamic Challenges, Tough Choices and the Next Phase, Kuala Lumpur: Pelanduk Publications.
Abdulai, D. N., 2001, African Renaissance: Challenges, Solutions and the Road Ahead, London: ASEAN Academic Press.
Abdulai, ed., D. N., 2001, Malaysia and the K-Economy: Challenges, Solutions and the Road Ahead, Kuala Lumpur: Pelanduk Publications.
Aggarwal, R., 1984, ‘The Strategic Challenge of Third World Multinationals: A New Stage of the Product Life Cycle of Multinationals?’, Advances in International Comparative Management, 1: 103-22.
Arndt, H. W., 1974, ‘Professor Kojima on the Macroeconomics of Foreign Direct Investment’, Hitotsubashi Journal of Economics, 15 (2): 26-35.
Akinkugbe, O. ‘ Flow of Foreign irect Investment to Hitherto Neglected Developing Countries’. Discussion Paper 2003/02. UNU/Wider.
Becker, G., S., 1993, Human capital: A Theoretical and Empirical Analysis with Special Reference to Education, Chicago: University of Chicago Press, p. 24.
Berlot, T. J. and Dale, R. W., 1992, Programs in Industrial Countries to Promote Foreign Direct Investment in Developing Countries, Washington, DC: World Bank.
Bhattacharya, A., Peter, M. and Sunil, S., 1997, ‘How Can Sub-Saharan Africa Attract More Private Capital Inflows?’, Finance and Development, 34 (2): 3-6.
Calamitsis, E. A., 1999, ‘Adjustment and Growth in Sub-Saharan Africa: The Unfinished Agenda’, Finance and Development, 36 (1): 6-9.
Dagash, I. A., 1998, ‘A Critical view on how the European Media Is Covering Africa’, Paper presented at the conference on Reporting Africa: Return to the Agenda, Cardiff, Wales.
Dunning, J. H., 1993, Multinational Enterprise and the Global Economy, London: Addison Wesley.
Economist, 1995, ‘Out of Africa, a Smooth Ride’, 10 June.
French, H., 1997, ‘Africa Takes Care of Crises on its Own Once Again’, New York Times, 9 June.
Gary, H. P., 1982, ‘Macroeconomic Theories of Foreign Direct Investment: An Assessment’, in Alan M. Rugman, ed., New Theories of the Multinational Enterprise, London: Croom Helm.
Hymer, S. H., 1976, The International Operations of National Firms: A Study of Direct Foreign Investment, Cambridge, Mass: MIT Press.
IMF, 1999, ‘Growth in Sub-Saharan Africa: Performance, Impediments and Policy Requirements’, World Economic Outlook, p. 141.
Iverson, C., 1953, Aspects of the Theory of International Capital Movements, London: Oxford University Press.
Kojima, K. and Terutomo, 1984, ‘Micro and Macro-economic Models of Direct Foreign Investment: towards a synthesis’, Hitotsubashi Journal of Economics, 25 (2), pp. 1-20.
Kojima, K., 1982, ‘Macroeconomic Versus International Business Approach to Direct Foreign Investment’, Hitotsubashi Journal of Economics, Vol. 23 (2), pp. 1-19.
Lall, S. and N. S. Siddharthan, 1982, ‘The Monopolistic Advantages of Multinationals: Lessons from Foreign Investment in the U.S.’, Economic Journal, 92 (367), pp. 668-83.
Lall, S., 1980, ‘Monopolistic Advantages and Foreign Involvement by U.S. Manufacturing Industry’, Oxford Economic Papers, 32, pp. 102-22.
Lee, C. H., 1984, ‘On Japanese Microelectronics Theories of Direct Foreign Investment’, Economic Development and Cultural Change, 32 (4) 713-23.
Lewis, W. A., 1978, The Evolution of the International Economic Order, Princeton, New Jersey: Princeton University Press.
Lippman, T., 1996, ‘Foreign Aid by U.S. Declines’, International Herald Tribune, 19 June.
OECD/AfDB, 2004, ‘African Economic Outlook 2003/04’, www.oecd.org/dev/ africanoutlook.
OECD, 1995, Taxation and FDI: The Experience of Economies in Transition, Paris: OECD.
Ouattara, A. D., 1999, ‘Africa: An Agenda for the 21st Century’, Finance and Development, 36 (1), pp. 2-5.
Tillet, C., 1996, ‘Foreign Investment: Targeting and Promotional Strategies’, London: Commonwealth Secretariat, Occasional paper No.2, Mimeo.
Uganda Investment Authority, 1998, End of Year Report 1997, Kampala: Uganda Investment Authority.
United Nations Economic Commission for Africa, 2003, Economic Report on Africa, Addis Ababa, Ethiopia: UNECA.
United Nations Economic Commission for Africa, 2001, Transforming Africa’s Economies: Overview, Addis Ababa, Ethiopia: UNECA, pp. 1-3.
UNCTAD, 2005, Economic Development in Africa: Rethinking the Role of Foreign Direct Investment, New York and Geneva: United Nations.
UNCTAD, 2002, World Investment Report, New York and Geneva: United Nations UNCTAD, 2001, ‘Promoting Linkages’, World Investment Report, New York: and Geneva: United Nations.
UNCTAD, 2000, Capital Flows and Growth in Africa, New York and Geneva: United Nations.
UNCTAD, 1999, Foreign Direct Investment in Africa: Performance and Potential, New York: and Geneva: United Nations.
Wall Street Journal Europe, 1999, ‘Nigeria’s President-Elect Aims to Uproot Corruption, Boost Foreign Investment’, 19 March.