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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Foreign direct investment in southern and eastern Africa's infrastructure
Author:Sader, FrankISNI
Year:1997
Periodical:Internationales Afrikaforum
Volume:33
Issue:2
Pages:177-185
Language:English
Geographic terms:East Africa
Southern Africa
Subjects:foreign investments
transport
Abstract:Since the late 1980s, the developing world is experiencing a virtual boom in private investment in infrastructure areas, which previously had been considered the exclusive domain of the public sector. Much of this investment capital has come from abroad in the form of foreign direct investment. However, in southern and eastern Africa, private investment in infrastructure projects is lagging. The riskiness of the business environment, combined with legal, regulatory and procedural impediments, have frequently made it difficult for investors to develop specific infrastructure projects. Conditions are improving, however, and an increasing number of countries are looking for private sector solutions. If governments can take the actions necessary to address the key factors influencing investor perceptions of risk, there is no reason why private capital cannot be attracted to these countries on a more sustained basis. The most commonly encountered difficulties in southern and eastern Africa include the following: lack of government commitment; high transaction costs; an unreliable privatization process; non-transparent negotiations; limited domestic entrepreneurship; popular resistance to high returns and market pricing; weakness of domestic financial institutions; unclear regulatory frameworks for service provision. Notes, ref.
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