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Disruptive Technology, Foreign Direct Investment and Private Sector Development Polices in Africa

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Disruptive Technologies, Innovation and Development in Africa

Part of the book series: International Political Economy Series ((IPES))

Abstract

The chapter examines how privatization and investment policies can serve as a source of foreign direct investment (FDI) in Africa. The current policy focus on domestic resource mobilization (DRM) needs to be complemented with external resource transfer such as FDI because the latter is a major route for technological spillover and a key source of development finance. Many African countries have been opening their economies to various degrees since the late 1980s. There is an increasing trend in privatizing state enterprises in African countries, and that is encouraging investment from emerging economies such as China, India and Turkey as well as from traditional development partners such as the Organization for Economic Cooperation and Development (OECD). Using a longitudinal/panel data, this chapter discusses the current state and evolution of development finance such as inward foreign direct investment (IFDI) within the context of privatization and investment policies in Africa. It finally emphasizes the role of IFDI for employment and the transfer of technical and management know-how.

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Notes

  1. 1.

    The eight building blocs are ECOWAS, EAC, ECCAS, SADC, AMU, IGAD, COMESA and CEN-SAD. Other regional initiatives such as CEPGL and CEMAC, among others, exist but are not recognized by the AUC.

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Author information

Authors and Affiliations

  1. Regional Integration and Trade Division, United Nations Economic Commission for Africa, Addis Ababa, Ethiopia

    Joseph Baricako

  2. Sheffield University Management School, University of Sheffield, Sheffield, UK

    Abbi M. Kedir

Authors
  1. Joseph Baricako
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  2. Abbi M. Kedir
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Corresponding author

Correspondence to Abbi M. Kedir .

Editor information

Editors and Affiliations

  1. Department of Political Science, Dalhousie University, Halifax, NS, Canada

    Peter Arthur

  2. African Development Bank, Abidjan, Côte d'Ivoire

    Kobena T. Hanson

  3. Department of Sociology, Grant MacEwan University, Edmonton, AB, Canada

    Korbla P. Puplampu

Appendices

Annex 1: Main FDI Destinations (in Billions of Dollars)

Destination

2012

Destination

2013

Destination

2014

Destination

2015

Destination

2016

Destination

2017

Destination

2018

Nigeria

7127.39

South Africa

8300.10

South Africa

5770.66

Angola

10028.22

Angola

−179.52

Egypt

7408.70

Egypt

6797.60

Egypt

6031.00

Mozambique

6175.12

Mozambique

4901.79

Egypt

6925.20

Togo

−46.28

Congo

4406.04

South Africa

5334.00

Mozambique

5629.41

Nigeria

5608.45

Nigeria

4693.83

Mozambique

3866.83

Gambia

−27.70

Ethiopia

4017.10

Congo

4313.14

South Africa

4558.85

Egypt

4256.00

Egypt

4612.00

Congo

3803.30

South Sudan

−17.00

Nigeria

3503.00

Morocco

3640.38

Congo, DRC

3312.14

Morocco

3298.10

Angola

3657.51

Morocco

3254.80

Libya

0.00

Ghana

3255.00

Ethiopia

3310.30

Ghana

3293.43

Ghana

3226.33

Morocco

3561.24

Ghana

3192.30

Mayotte

0.00

Morocco

2686.03

Ghana

2989.00

Morocco

2728.36

Zambia

2099.80

Ghana

3356.99

Nigeria

3064.17

Reunion

0.00

Mozambique

2293.10

Mozambique

2711.13

Sudan

2311.00

Congo, DRC

2098.25

Ethiopia

1855.05

Ethiopia

2626.52

Saint Helena

0.00

South Africa

2006.86

Nigeria

1997.49

Tanzania

1799.60

Tanzania

2087.30

Congo, DRC

1843.17

South Africa

1729.38

Burundi

0.06

Gabon

1498.04

Kenya

1625.92

Zambia

1731.50

Algeria

1696.87

Congo

1659.45

Sudan

1728.37

Comoros

3.57

Congo, DRC

1340.20

Algeria

1506.32

  1. Source: Authors from UNCTAD, 2019, and FDI Markets, 2019

Annex 2: Main FDI Destinations, Ten Years Average (in Billions of Dollars)

Destination

1990–1999

Destination

2000–2009

Destination

2010–2018

Tanzania

1.21

Congo

6.61

Sudan

14.04

Zambia

1.41

Angola

12.19

Congo

17.23

Algeria

1.58

Sudan

12.88

Congo, DR

17.59

Côte d’Ivoire

2.32

Tunisia

13.46

Ethiopia

18.34

Tunisia

4.20

Libya

14.10

Morocco

25.47

Morocco

5.59

Algeria

14.14

Ghana

28.56

Angola

5.74

Morocco

18.27

Mozambique

34.76

Egypt

8.05

South Africa

40.98

South Africa

37.81

South Africa

8.50

Nigeria

41.79

Nigeria

45.46

Nigeria

14.94

Egypt

47.99

Egypt

50.04

  1. Source: Authors from UNCTAD, 2019, and FDI Markets, 2019

Annex 3: Top Ten FDI Receiving African Countries, from the 1990s to the 2010s (in Billions of Dollars)

figure a

Source: Authors from UNCTAD, 2019

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Baricako, J., Kedir, A.M. (2020). Disruptive Technology, Foreign Direct Investment and Private Sector Development Polices in Africa. In: Arthur, P., Hanson, K., Puplampu, K. (eds) Disruptive Technologies, Innovation and Development in Africa. International Political Economy Series. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-40647-9_11

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