1 - Attracting Foreign Direct Investment for Growth and Development in sub-Saharan Africa: Policy Options and Strategic Alternatives

Abstract

Foreign Direct Investment (FDI) plays an important role in fostering economic growth and development in developing countries. While FDI is known to bring to the latter much needed capital for their growth and development efforts, it also brings with it skills and new technology. For most countries in sub-Saharan Africa, whose economies have recently recovered from a long period of stagna- tion, FDI inflows are needed to accelerate growth, and development. Several countries in the region registered impressive growth rates in the 1990s, with some attaining and sustaining double-digit growth rates in most recent times. However, if sub-Saharan Africa is to accelerate its growth rates to enable it move the majority of its peoples out of poverty, it must attract more FDI. Efforts so far have been encouraging. However, when compared to countries in South East Asia such as Singapore, Malaysia, Thailand and China, FDI inflows into sub- Saharan Africa pale. What are the causes for such low FDI inflows to this re- gion? How can sub-Saharan Africa attract more FDI for its growth and develop- ment efforts? What policy options are available to these countries? What strategic alternatives can sub-Saharan countries adopt to increase FDI inflows? What role can multilateral and bilateral organisations play in this effort? This paper will address these questions by examining current FDI flows into sub-Saharan Africa and examine ways through which the sub-region can further attract much needed FDI to enable it to attain sustainable growth and development.