Foreign Direct Investment in Africa—Some Case Studies

IMF Working Papers, April 1, 2002

Source details

Canonical URL

Foreign Direct Investment in Africa—Some Case Studies

Other formats

• Markdown version
• Structured JSON version
• Bundle manifest

Bibliographic details

• Authors: Anupam Basu, Krishna Srinivasan
• Published: April 1, 2002
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781451848182.001

Summary and main findings

• Reviews experiences of a few countries in Sub-Saharan Africa that have succeeded in attracting fairly large amounts of foreign investment.
• Concludes that sustained efforts to promote political and macroeconomic stability and implement essential structural reforms have been key elements contributing to success in attracting a substantial volume of FDI.
• Emphasizes strong leadership that has helped promote democracy and overcome social and political strife, and a firm commitment to economic reform, as important determinants of FDI attraction.
• Notes that the adoption of sound fiscal and monetary policies, supported by an appropriate exchange rate policy, and a proactive approach to removing structural impediments to private sector activity have had a positive bearing on investor sentiment.
• Underscores the importance of relying on stability and a broad-based reform effort to encourage foreign investment in Africa.

Determinants of FDI highlighted

• Political stability and promotion of democracy.
• Macroeconomic stability via sound fiscal and monetary policies.
• Appropriate exchange rate policy.
• Structural reforms to remove impediments to private sector activity.
• Strong leadership and commitment to economic reform.
• Positive investor sentiment resulting from the above factors.

Policy implications and recommendations

• Pursue sustained political and macroeconomic stability as foundational to attracting FDI.
• Implement essential structural reforms to facilitate private sector activity.
• Maintain sound fiscal and monetary policies and an appropriate exchange rate policy to support investor confidence.
• Promote strong, reform-minded leadership to address social and political strife and to advance democratic governance.
• Adopt a proactive approach to removing structural impediments and barriers to private investment.

Subjects and keywords

• Subjects: Balance of payments, Economic sectors, Environment, Exports, Foreign direct investment, International trade, Natural resources, Privatization, Tax incentives, Taxes.
• Keywords: a number of country; a number of host-country factor; Africa; Asia and Pacific; Central and Eastern Europe; countries in Africa; credit risk rating; economic reform; economic reforms; equity capital; Europe; Exports; FDI flow; FDI inflow; Foreign direct investment; Global; host-country market; market size; monopoly Lesotho Electricity Corporation; Natural resources; private sector; Privatization; reform program; stability; Tax incentives; WP.

Content in this bundle

• Foreign Direct Investment in Africa - Some Case Studies - WP/02/61
  • Foreign Direct Investment in Africa - Some Case Studies - WP/02/61 (Markdown version)
  • Foreign Direct Investment in Africa - Some Case Studies - WP/02/61 (PDF)