Published by the government of Zimbabwe
Sifelani Tsiko
16 November 2009
Addis Ababa — AFRICA needs continuous flows of foreign direct investment to stimulate economic growth and reduce poverty levels on the continent, economists say.
African Development Bank economist Gaston Gohou told delegates at the fourth annual African Economic Conference that there is a strong positive relationship between FDI and welfare at the aggregate African level.
"This strong positive relationship holds even after controlling for government size, indebtedness, macroeconomic instability, infrastructure development, institutional quality, political risks, openness to trade, education and financial market development," he said.
However, he said: "When taken at the regional level, the impact of FDI on welfare is no longer obvious and differs across regions."
FDI, Gohou said, played a critical role in the achievement of Millennium Development goals which aim to improve human development and reduce poverty.
The global economic and financial crisis has forced several multinational companies to cancel or postpone investments in Africa and the UNDP estimates that about $70 billion of FDI meant for the continent was cancelled this year alone. This is about 17 percent of Africa's $393 billion total FDI stock.
"Most African countries are off-track on meeting their goals and they require significant levels of capital investment to help them get back on track," Gohou said. "One main source of this capital investment is the private sector seen as the principal driver of growth."
More than 300 policy-makers and economists met here to discuss the impact of Foreign Direct investment (FDI) on poverty reduction in Africa.
Most of the participants admit that the current financial crisis has had stronger negative repercussions on economic growth in Africa because of the reduction in foreign capital flows.
Gohou and other economists say Africa need to put policies in place to attract foreign investment tailored to address the specific needs of each regional.
"To be effective, policies should also account for economic convergence within regions and differences between regions," he said.
The World Bank estimates that remittances to Sub-Saharan Africa fell by 8,3 percent this year creating difficulties for many African countries.
The latest United National Conference on Trade and Development World Investment Report, which was released in September this year indicates that Africa's flows which peaked at US$88 billion in 2008 fell by about 67 percent from that position in 2009.
The FDI drop had a knock-on effect on growth and infrastructure development in Africa and UNCTAD warned that the recovery in FDI flows was expected to be slow after the decline of 2009.
Across the globe, flows were expected to climb to no more than US$1,4-trillion in 2010 and gather momentum to approach US$1,8-trillion in 2011.
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IS AFRICA FOR SALE ?
1) I’ve heard that one African country made a 99-year deal with an Asian country to lease a part of their land.
2) How can anyone make a deal for the next generation ?
3) What can we do about it ?
4) Organize and get those crooks out of office or any position of power.
5) Pray to God For insight and divine intervention.
6) Africa Is being targeted by many who are not respecting Africa.
7) We must stop selling ourselves and respect ourselves, our families and God.
Daniel 11:44 But NEWS OUT OF THE EAST (CHINA?) AND OUT OF THE NORTH ( RUSSIA ?) shall trouble him: therefore he shall go forward with great fury to destroy, and utterly to make away many
Revelations 16:12 And the 6th angel poured out his vial upon the great river Euphrates; and the water of it was dried up, that the way of the KINGS OF THE EAST might be prepared.
[Daniel 11:14 ]]
And in those times there shall many stand up against the king of the south(AMERICA / BABYLON ): ALSO the ROBBERS OF OUR PEOPLE shall exalt themselves to establish the vision; BUT THEY SHALL FALL !
WAKE UP ! STAY UP MY BROTHERS & SISTERS !
[ www.libradio.net]
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- Life Is a Game. Have Fun. [ Luke 18:17 / Isaiah 11:6 ]