Friday, March 29, 2024

African Countries Aren’t Getting As Much As They Should From Foreign Direct Investment

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Economic growth is driven by a number of factors. These include foreign direct investment, national savings, household spending, fiscal and monetary policies. Since the late 1980s African governments have fully embraced foreign direct investment as a major driver of growth.

One of the avenues through which countries have sought to attract more foreign direct investment has been investment summits. These are hosted jointly with developed countries. They include the Africa-China Investment SummitAfrica-UK Investment Summit and the Africa-US Investment Summit.

Despite these efforts, data shows that African countries have not been a major recipient of these flows. In fact, it attracts a lot less than other developing countries.

There’s a bigger problem too – the impact on economic growth of the foreign direct investment the continent attracts is lower than other comparable parts of the world. In our research we set out to understand why. To do this, we looked at the financial services sector which is underdeveloped in most African countries. Read more…

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