Inderscience Publishers

Foreign direct investment in Sub–Saharan Africa

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This article deals with the domestic and private foreign direct investment in sub–Saharan African countries. The region share of global foreign direct investment inflows is 0.4% in 1990–2000, and 24% in 2004–2005. The most important reasons are linked with the socio–political and structural conditions. The African saving ratio is 18.1%, inflation 7.4% in 2009. This article shows that the macroeconomic reforms affect the foreign direct investment inflows. The result of this study reveals that privatisation process has led to a huge capital investment increase. Fifty–nine points of uncertainty for investors in 2001 is resulting from wars, political and social instability and corruption. This paper suggests some solutions to attract and increase foreign investment. Some reforms are needed to improve governance, reduce corruption, respect for laws, and eliminate socio–political violence. There is also a need for creating efficient infrastructure services.

Keywords: foreign direct investment, FDI, Sub–Saharan Africa, savings ratio, inflation, macroeconomic reforms, privatisation, capital investment, uncertainty, wars, political instability, social instability, governance, corruption, laws, socio–political violence, infrastructure services

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