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 Periodical article |
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| Title: | Promoting of Investment in Africa |
| Author: | Anyanwu, John C. |
| Year: | 2006 |
| Periodical: | African Development Review |
| Volume: | 18 |
| Issue: | 1 |
| Period: | April |
| Pages: | 42-71 |
| Language: | English |
| Geographic term: | Africa |
| Subjects: | investments Development and Technology Economics and Trade international relations |
| External link: | https://onlinelibrary.wiley.com/doi/10.1111/j.1467-8268.2006.00132.x/pdf |
| Abstract: | This paper examines the trend, constraints, promotion, and prospects of investment - domestic investment, foreign direct investment, and private portfolio investment - in Africa. After identifying the importance of investment in Africa's economic development, it is shown that all forms of investment are low in Africa. The constraining factors include low domestic resource mobilization; high degree of uncertainty; poor governance, corruption, and low human capital development; unfavourable regulatory environment and poor infrastructure; small individual country market sizes; high dependence on primary commodities exports and increased competition; poor image abroad; shortage of foreign exchange and the burden of huge domestic and external debt; and undeveloped capital markets, their high volatility, and home bias by foreign investors. The paper recommends that successful promotion of both domestic, foreign direct and portfolio investment in Africa will require actions and measures at the national, regional, and international levels. It concludes that the prospects are bright without denying that obstacles do remain. Economic reforms to enhance domestic investment will need to be complemented by measures to attract increased foreign capital. Critical in such endeavours must be efforts to improve governance in some countries as well as to eliminate sociopolitical violence in others, and development of domestic capital markets, while government institutions must be modernized and upgraded. Bibliogr., sum. [Journal abstract, edited] |
