Foreign Direct Investment in Africa and challenges ahead

Abstract

The objective of this article is to put forward policy recommendations regarding the management and institutional promotion of the flows of Foreign Direct Investments (FDI) received by Africa. There are three main geographic areas that channel FDI to the African continent: the United States, China and the European Union. This paper studies the strategies adopted by these investors in Africa, performs an analysis of public FDI data towards Africa, and shows the strategic business approaches of multinationals that channel IDE towards Africa. On the other hand, the impact of FDI in developing economies is examined and a conceptual framework is proposed to explain the beneficial effects of FDI in Africa. Based on our model, some policy recommendations on this matter are presented.

Keywords:

FDI, Africa, sustainable development, multinational corporations (MNC)