The Performance, Challenges and Responsibilities in attracting Foreign Direct Investments in Africa

It is well-established that investment – whether national or foreign direct investment (FDI) -- is critical for promoting economic growth and sustainable and inclusive development. Specifically, any investment, including national, intra-regional, and extra-regional foreign investment, expands the productive capacity of any economy and drives job creation and income growth.

Researchers like Chantal Dupasquier and Patrick N. Osakwe have examined the performance, promotion, and prospects for foreign direct investment (FDI) in Africa. They identified factors such as political and macroeconomic instability, low growth, weak infrastructure, poor governance, inhospitable regulatory environments, and ill-conceived investment promotion strategies, as responsible for the poor FDI record of the region.

The paper stresses the need for more trade and investment relations between Africa and Asia. It also argues that countries in the region should pay more attention to the improvement of relations with existing investors and offer them incentives to assist in marketing domestic investment opportunities to potential foreign investors.

They also contended that the current wave of globalization sweeping through the world has intensified the competition for FDI among developing countries. Consequently, concerted efforts are needed at the national, regional, and international levels in order to attract significant investment flows to Africa and improve the prospects for sustained growth and development.

It is perhaps to address some of the above research findings; the Economic Community of West African States (ECOWAS) Commission is steadfastly espousing cooperative competition principles on regional basis expected to yield superior economic and social welfare benefits with respect to economic efficiency, prosperity, and distribution to achieve inclusive and equitable growth and development.

To “get out in front” of this strategic issue and become a major global leader on this critical subject, the ECOWAS Commission, together with the Member States, has prepared this ECOWAS Investment Climate Policy Framework (ECOWICPF) for adoption by the Member States. The primary purpose of the ECOWICPF is to establish harmonized regional investment-climate policies for the Member States to follow that will maximize the economic and social benefits of regional integration through co-operative competition alliances in West Africa.

In an invitation letter signed by the ECOWAS Commissioner, Industry & Private Sector Promotion; Mr. Mamadu TRAORE, a team of heads of Investment Promotion Agencies (IPAs) and Ministers in charge of investments and policy experts in the sub-region will be meeting in the Capital of Togo on 19th September 2018 to validate the draft Community Investment Policy and Code.

The meeting will be preceded on the 17& 18 September by a team of experts, representatives of ministries, IPAs and private sector.

 

Source: GIPC PR Team

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