It’s hard for foreign investors

Foreign direct investment is when a company located in one country invests directly into production in another country either by buying a company in the foreign country or by expanding operations of an existing business in that country. Is sounds like a really great thing, but there must be some reason that not everyone is doing it.

The advantages of FDI are cheaper wages, diversified holdings, expanded workforce, stronger company infrastructure and weakened business regulations.

The disadvantages of FDI are foreign ownership, lessened company value and local collateral lending can have a cheapened return.

In Africa, Moyo states that for investors, the current disadvantages outweigh the advantages for FDI. To change this, Moyo says that AFrican policy makers “must woo FDI investors in addition to building a regulatory and legal structure that supports businesses.”

For Chad in 2011, FDI was promoting positive growth. Here is indexmundi.com’s take on Chad’s FDI growth:

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