Foreign Direct Investment in Africa—Some Case Studies

Anupam Basu and Krishna Srinivasan

No 2002/061, IMF Working Papers from International Monetary Fund

Abstract: This paper reviews the experiences of a few countries in Sub-Saharan Africa that have succeeded in attracting fairly large amounts of foreign investment. The review indicates that sustained efforts to promote political and macroeconomic stability and implement essential structural reforms have been the key elements contributing to the success that certain countries in Africa have achieved in attracting a substantial volume of FDI. Strong leadership, which has helped promote democracy and overcome social and political strife, and a firm commitment to economic reform have been important determinants. 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. The analysis underscores the importance of relying on stability and a broad-based reform effort to encourage foreign investment in Africa.

Keywords: WP; economic reform; private sector; a number of host-country factor; FDI inflow; Africa; Foreign direct investment; stability; economic reforms; FDI flow; host-country market; countries in Africa; a number of country; reform program; equity capital; monopoly Lesotho Electricity Corporation; credit risk rating; market size; Tax incentives; Natural resources; Exports; Privatization; Global; Central and Eastern Europe; Europe; Asia and Pacific (search for similar items in EconPapers)
Pages: 41
Date: 2002-04-01
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Citations: View citations in EconPapers (29)

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