Investing in Africa

As we have seen with our research thus far, Dambisa Moyo is very confident with the people of Africa and feels that wealthy nations should invest in both the people of these countries and the development of their infrastructure. There are many things that a nation could gain from investing in an impoverished land and it helps the receiving areas as well. Moyo talks about how if Africa can entice investors with a positive outlook for the future, they could form a mutualistic relationship of sorts that would aid both members immensely. The changes that an financial investment could make in these lands is quite apparent: creating jobs, stabilizing economies, boosting technological research, and opening up previously isolated areas to the global economy. Moyo talks quite a bit about FDI, or Foreign Direct Investment, which is a situation in which an investor from a foreign country helps a local business or creates its own new company in these lands. I agree thoroughly with Moyo that FDI is a great way to bring a stable boost to the economy of poverty-stricken nations, for it is beneficial for both the investor and the lands in which they invest.

While the effects of FDI are extremely helpful to these African nations, they must first convince investors that they are stable enough to maintain the new businesses that they wish to grow. Many African governments are still very corrupt and investors cannot be sure that their money will be protected or that their investment will go towards a relevant cause. These and other underlying reasons can scare off potential aid to these areas, even with the supportive elements that Moyo feels makes them successful targets for investment. Additionally, these lands must give incentive for wealthy nations to want to develop in their economy, whether it be related to tax breaks or more relaxed laws relating to business.

Chinese FDI involvement in Africa

Recently, we have been able to see the effects of FDI for ourselves. China has invested quite a bit in “no-strings attached” deals in many African areas. Whether they are creating new businesses or paving roads, they are giving many impoverished areas a chance at a stable economy. By investing here, they are creating many jobs and empowering the locals of these areas. With such a large population, China cannot possibly sustain itself with all local resources. However, it cannot be ignored how much Chinese investments have improved life for many people. While China is taking over fertile lands and taking natural resources of untouched lands for themselves, it is also aiding the citizens of the nearby areas, therefore creating a mutual relationship for both sides. While there are many that feel China is taking advantage of less developed lands, we can see that the idea of FDIs is one that can lead to success and prosperity for all.

Increase in exports from Africa from 1998-2006


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