Foreign Direct Investment in Africa : Policies Also Matter
Africa has not succeeded in attracting much foreign direct investment in the past few decades. When countries did attract multinational companies, it was principally because of their (abundant) natural resources and the size of their domestic marke...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2000/11/717449/foreign-direct-investment-africa-policies-also-matter http://hdl.handle.net/10986/19748 |
| Summary: | Africa has not succeeded in attracting
much foreign direct investment in the past few decades. When
countries did attract multinational companies, it was
principally because of their (abundant) natural resources
and the size of their domestic market. Angola, Cote
d'Ivoire, Nigeria, and South Africa have traditionally
been the main recipients of foreign direct investment in
Sub-Saharan Africa. But the author shows that a few
Sub-Saharan countries have generated interest among
international investors by improving their business
environment. In the 1990s, Mali, Mozambique, Namibia, and
Senegal attracted substantial foreign direct
investment--more so than countries with bigger domestic
markets (Cameroon, Republic of Congo, and Kenya) and greater
natural resources (Republic of Congo and Zimbabwe). Mali and
Mozambique, which improved their business climate
spectacularly in the 1990s, did so with a few strategic
actions: liberalizing trade, launching an attractive
privatization program, modernizing mining and investment
codes, adopting international agreements on foreign direct
investment, developing a few priority projects that had
multiplier effects on other investment projects, and
mounting an image-building effort in which political figures
such as the nation's president participated. These
actions are similar to those associated with the success of
other small countries with limited natural resources, such
as Ireland and Singapore about 20 years ago. |
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