Foreign Direct Investment in Africa Policies Also Matter

Africa has not been very successful in attracting foreign direct investment (FDI) over the past few decades. When these countries were able to attract multinational companies, it was principally the result of their (abundant) natural resources and the size of their domestic market. Still, this paper demonstrates that a few SubSaharan African countries have generated the interest of international investors by improving their business environment, suggesting that they can become competitive internationally and attract FDI on a sustainable basis. This conclusion does not differ from the successful and well-known experience of countries such as Ireland and Singapore. *Program Manager for Africa, Foreign Investment Advisory Service of the International Finance Corporation and the World Bank. The author would like to thank Dale Weigel, James Emery, Marcelo Olareagga, Dorsati Madani, Charles Vellutini, Joe Battat, Bijit Bora, Gene Tidrick, Onno Ruhl, Charles Albert Michalet and two anonymous referees for their valuable comments. The views expressed here are the author’s own and do not necessarily reflect those of the institution to which he is affiliated. This paper will be published by Transnational Corporations (forthcoming).