Original Research

Foreign direct investment to Africa: trends, dynamics and challenges

Elsabe Loots, Alain Kabundi
South African Journal of Economic and Management Sciences | Vol 15, No 2 | a148 | DOI: https://doi.org/10.4102/sajems.v15i2.148 | © 2012 Elsabe Loots, Alain Kabundi | This work is licensed under CC Attribution 4.0
Submitted: 15 December 2010 | Published: 05 June 2012

About the author(s)

Elsabe Loots, North-West University, South Africa
Alain Kabundi, University of Johannnesburg, South Africa

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The FDI debate is often characterised by generalities about the importance of these flows within the global context.  This article aims to unpack the African-specific FDI issues in order to get a clearer and more substantiated understanding of the current trends, dynamics and challenges, with emphasis on the period since 2000.  The research concludes that nominal flows to the continent are on the increase, with exponential increases over the past decade.  The descriptive analysis indicates that flows to the continent are unevenly spread and are concentrated in the largest economies and/or in petroleum-/oil-exporting countries.  The impact of FDI on growth and investment in particularly smaller economies indicates that FDI inflows are making a substantial contribution to these economies and illustrates the importance of this source of investment.  The econometric analysis reveals that oil exporters and the size of the economy are powerful explanatory variables in explaining FDI flows to Africa, with trade openness a positive, but less powerful variable.


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Crossref Citations

1. Foreign Direct Investment and Economic Growth: The Case of Developing African Economies
Mebratu Seyoum, Renshui Wu, Jihong Lin
Social Indicators Research  vol: 122  issue: 1  first page: 45  year: 2015  
doi: 10.1007/s11205-014-0679-6