International Trade with Special Emphasis to FDI Issues in Africa
International trade results in an increase in efficiency and also allow countries to participate in a global economy, encouraging the opportunity of foreign direct investment (FDI). FDI plays an important role in bringing growth opportunities such as technology transfer, export development, job and skill creation in host countries. There are a number of factors come into play to determine the growth and development effect of FDI.
In Africa FDI flow has grown dramatically as a major form of international capital transfer over the past three decades. However, there is a big difference among sub-regions of Africa on the pace of growth and investment share. Due to these, this study was necessary to assess some of the reputed practices of selected African countries FDI policies and their strategies. The study focused on members of Common Market for Eastern and South Africa (COMESA) Countries were selected. From which Ethiopia from Horn of Africa, Egypt from North Africa, Madagascar from Indian Ocean, Uganda from African Great Lakes, Zambia from Southern Africa and South Sudan from Central Africa were selected for discussion due to their high share in FDI inflow.
Secondary data had been employed. The study found that Northern and Western sub-region of Africa exhibited the highest FDI inflow against the rest of African sub-regions. Majority of successful African countries in FDI inflow is mainly because, their focus is targeted on addressing on the major constraints of their county and providing priority and incentives to foreign investors to come up with solution to the existing economic, technological and managerial scenario. Accordingly, in order to exhibit substantial improvement in the share of FDI flow to Africa, recommendations and policy implications have been drown.
Keywords: Africa, COMESA, FDI, Foreign Investor, International Trade
Volume: 4 | Issue: 1
Issue Date: February , 2014