Economic Commission ( Ec ) For Afric A Perspective Of Foreign Direct Investment ( Fdi )

It is undisputable that the U.S has opened the doors to many countries, establishing multinational corporations and emerging new markets to explore international waters to help other nations flourish and gain a competitive advantage. For many years Africa has been floating in the U.S radar. The U.S has looked for ways to cultivate the land, understand the culture; people and strengthens its relationship with the African government. In recent years the continent has grown significantly with the opportunity of U.S market access and the creation of new export trade avenues to Africa. In May 2000, The African Growth and Opportunity Act (AGOA), a unilateral, trade agreement between Sub-Saharan Africa and the United States, launched new efforts to grow the African market. The enactment was deliberately created for eligible countries to participate in trade opportunities and to export their products to the U.S markets with duty free privileges. The opportunity has developed a substantial amount of trade and investment between Sub-Saharan countries and the U.S. Subsequently, the Doing Business in Africa (DBIA); campaign took effect on November 2012. The campaign’s major goal was to connect American businesses with African partners, to support existing and new U.S investments in Africa. Additionally, to inform and provide access to American companies to finance their exports and reduce barriers to trade and investment in Africa. In August 2014, the U.S and African leaders Summit

Global Foreign Direct Investment (FDI) fell by 18 per cent to $1.3 trillion in 2012. This decline was in sharp contrast to other key economic indicators like GDP and unemployment registered positive growth at the global level (United Nations, 2013). The economic fragility and policy uncertainty in a number of economies has caused a domino effect causing concern among investors. However, FDI flows to developing countries prove to be more resilient than flows to developed countries, recording their second

FDI allows the home country to invest into the host country to produce, advertise, and distribute products, in order to upsurge their market share and provides a long-term investment and enhancement. (Moosa, 2002)

This essay will give a general introduction about the location choice of foreign direct investment (FDI). After that, it will focus on

The research this material accounts for mainly focuses on the pros and cons of FDI regarding corporations more than host countries, like what are the factors that attract multinational’s investment, what are the risk of expropriation, the extent of the development of stock markets, and what is the linkage between democracy and foreign investment (Bekaert, Harvey, & Lundblad, 2011; Busse & Hefeker, 2007; Eichengreen et al., 2011; Li, 2009). Indeed, this specific research tells little about the host countries in this international flux of investment rather than distinguishing between developed and less-developed countries (LDCs).

“Once viewed as the preserve of autocrats and corruption, some countries in Africa are now seen as the new, high-yield investment frontier.” (Herbst, Jeffery and Mills, Greg, JULY 11, 2013)

There are many issues to be looked at when trying to better understand the development or underdevelopment of African countries such as Ghana. According to Todd Moss’, “African Development,” some of these issues are: economic reform and the politics of adjustment, the international aid system, debt burdens and debt relief, poverty, human development, and HIV/AIDS, the African Union and regional institutions, Africa and world trade, and private investment and the business environment (Moss 2007). One of the main issues that will be looked into is the interaction of Ghana and World Trade. Some themes that need to be discussed when talking about trade are geography, leadership, and institutions. These themes all play a huge part in how a country handles the resources or products they have and whether or not they effectively get them to the world trade market. Ghana is ahead of most other African countries in these categories. They are moving forward and using the resources they have been blessed with to continue to grow and develop their country.

Even more so, she Badejo goes onto state, “Poverty is wide and very deep” (62). Therefore, by examining just this region of Africa, one can easily tell how the AU is having trouble seeking its funding needs. Yet, the AU tries to improve African economics. By encouraging economic integration and the lowering of trade tariffs and barriers, the AU hopes to allow their economy to thrive. This in turn will allow members to pay the needed membership dues to the AU.

While the study of the internationalisation process of Sub-Saharan Africa (SSA) firms in terms of their evolution and internationalisation have received less attention. Particularly, research on the internationalisation of Nigerian firms are still under explored (Bolaji & Chris, 2014; Boojihawon & Acholonu, 2013; Ibeh, 2003; Ibeh, Wilson, & Chizema, 2012) Even though, many SSA firms have emerged as high profile multinationals increasingly engaged in foreign expansion especially across the region. Such firms for examples include MTN, First Bank of Nigeria, Eco bank of Senegal, Dangote, ShopRite, Equity Group holdings, GlobalCom, SABMiller of South Africa, InterSwitch and Computer Warehouse Group to mention a few. These multinationals have emerged from different sectors of the economy, for example taking advantage of their home country favourable economic policies and domestic growth to internationalise (Initiative for Global Development and Dalberg Global Development, 2011; William, 2013).

As developing nations continue to expand their economic systems and find their place within the global market, the practice of Foreign Direct Investment (FDI) has become increasingly common. In 2013, developing nations received nearly 800 billion dollars of FDI, accounting for 54% of total global inflows (UNCTAD 2). Though many have elected to adopt a cautious approach, Foreign Direct Investment has proven to have a multitude of positive effects on developing nations’ collective labor rights and productivity. For these reasons, the Committee for Economic Development in Sub-Saharan Africa should

Der Lugt, S. H. (2007). Assessing China’s Role in Foreign Direct Investment in Southern Africa, Centre for Chinese Studies (C

As shown in the Figure 1, the UAE has jumped to the 11th position in 2014 against the 13th in 2013 and the 15th in 2012. The United Arab Emirates reported a $9.6 billion inflow of FDI in 2012, up from $7.7 billion the year before. (A.T. Kearney Foreign Direct Investment Confidence Index, 2014. p. 20). Besides Dubai, the foreign direct investment policies in the UAE have to be applied on the national scale and would be preferably to open more industries to the foreign investors. As matter of fact, the World Expo 2020 which will be staged in the UAE represents an opportunity to revise the foreign ownership policies in order to bring more investments in the country.

Kenya has recently experienced a surge in foreign direct investment (FDI) following a period of substantial declines in FDI inflows near the turn of the century. Net FDI flows to Kenya have not only been highly volatile but also generally declined in the 1980s and 1990s. Kenya’s total FDI as a percentage of GDP rose from 4.21 percent in 1980 to 7.39 percent in 2000 however this declined to 5.17 percent in 2006 and currently FDI as a percentage of GDP is a 7.52 percent (UNCTAD, 2014). The investment wave of the 1980s dwindled in the 1990s as the institutions that had protected both the economy and the body politic from arbitrary interventions were eroded. The FDI inflows to Kenya since 2008 have considerably improved from $96Million to $514Million in 2013. In recent years, China has emerged as a key source of FDI in Kenya.

Under 150 days stay before the Third International Conference on Financing for Development (FfD) happens in Addis Ababa. The African improvement financing connection has absolutely changed subsequent to the two past comparative social event in Monterrey in 2002 and in Doha in 2008: For instance, private capital streams, for the most part as remote direct speculation, and settlements have now overwhelmed official advancement help (ODA). Thus, China and alternate BRICS nations have firmly expanded their vicinity in the landmass.

After long consideration from our management team, we have decided to introduce a contingent set of initiatives corresponding to “Foreign Direct Investment” in Ethiopia. There has been a considerable rise of FDI opportunities recently within Ethiopia. The following document will discuss; cultural, political, as well as economic trends and patterns that influenced our outlook on FDI into Ethiopia. Moreover, this memo will analyze the potential risks and or barriers to entry, foreign firms could encounter when attempting FDI to Ethiopia. Lastly, our team will aim to outline a proposed plan relating to FDI in Ethiopia for our organizational business partners. There were many sources of information which influenced our “Foreign Direct Investment” conclusion for Ethiopia such as; research on cultural, political, and economic factors ongoing currently in Ethiopia. Additionally, our group is a combination of “Foreign Direct Investment” specialists including two Ethiopian counterparts residing within Ethiopia. Hence, a part of our investment plan includes first-hand direct insider Ethiopian research, conducted from Ethiopia. Accordingly, the strategies developed, by our management team, for FDI in Ethiopia have been formulated using high business acumen and business analytics pertaining to present Ethiopian economic conditions. Seemingly, one will see from these proposed FDI initiatives that Ethiopia is one of the most stable countries for