Foreign Direct Investment and Economic Development for Lesser Flow Countries: An African Sub-Regional Analysis

Abstract :

This study focused on foreign direct investment for lesser flow countries an African sub-regional analysis. Over the past forty years, foreign direct investment (FDI) in the region of Africa has had an unpredictable trend, making the flow pattern to be drastic increases followed by sudden decreases in succeeding years.

In the 1970’s and early 1980’s, the highest proportion of total FDI in the African region came to West Africa; so also, the North African sub-region has received a high proportion of total FDI next to the West African sub-region within the same period. The Southern sub-region also had the highest percentage proportion of total FDI in year 1974, 1997, and 2001. Overall, the West African sub-region benefited the highest proportion of total FDI with a percentage of 31.3 percent, followed by the North African sub-region, with a proportion of 29.1 percent. The proportion of West and North Africa put together amounted to over 60 percent of total FDI for the entire African countries, which implies that the two sub-regions together had a greater share than the other three sub-regions put together. Like East Africa, the Central African sub-region in all has also received only very low percentage of total FDI flow into Africa. (UNCTAD, 2012).