A number of economists
have been trying to examine why Sub-Saharan continues continue to sink in the
mud of extreme poverty whilst other region seem to do better. This scenario
will lead us back into the world of foreign direct investments from the post-war
period up until the new millennium. There is a general consensus among
academics and government advisors that FDI bring vast opportunities to the host
market (country) especial in areas of growth and development. In this analysis,
I will try to concentrate more on examining the distribution of the global
economic activities (FDI)with a major focus on the Sub-Saharan Africa
The global FDI had been pre-dominantly, dominated by western economies of which
the US was/is the key player followed by Great Britain and then Japan in the
first three decades of the post war era. In other words FDI was controlled by
the Triad (US, Europe and Asia) through the 1970s and the geographic position
has not yet changed since then. It is also important to note that, the rapid
growth of foreign investments were merely a result of uncertainty associated
with global trade due to trade restrictions as former enemies couldn’t open
their market to each other. So International trade virtually collapsed, in the
1950s up till the 60s and then came the collapse of the gold standard in the
early 1970s. Analyst at the time thought the crumble of the global financial
was going to cripple both inward and outward FDI, but truth the trend in FDI
continued at a faster rate.
Despite those harsh economic polices at the time , world FDI continued to grow at an escalating rate but mainly concentrated within advanced economies which showed that government policy have no effect whatsoever on firms decision to invest in foreign markets. Infact the first three decades of post-war period was even much tough to do business but multinational firms overcame hurdles to the extend that there was ever increasing global economic activities throughout those years. However the distribution of FDI was/is uneven with Sub-Saharan African accounting for less private capital inflows even up to now. A number of studies were carried out on FDI inflows into the Sub African continent but nothing much proved positive including those policies advocated by (neo-liberal liberal economists. Again some of the most important variables were tasted (infrastructure development and human capital skills) to see if they contribute the amount of capital inflows into this region, results were mixed. Most genuine economists have sort to find ways of attracting investment in the Sub-Saharan continent but all studies failed.
Despite those harsh economic polices at the time , world FDI continued to grow at an escalating rate but mainly concentrated within advanced economies which showed that government policy have no effect whatsoever on firms decision to invest in foreign markets. Infact the first three decades of post-war period was even much tough to do business but multinational firms overcame hurdles to the extend that there was ever increasing global economic activities throughout those years. However the distribution of FDI was/is uneven with Sub-Saharan African accounting for less private capital inflows even up to now. A number of studies were carried out on FDI inflows into the Sub African continent but nothing much proved positive including those policies advocated by (neo-liberal liberal economists. Again some of the most important variables were tasted (infrastructure development and human capital skills) to see if they contribute the amount of capital inflows into this region, results were mixed. Most genuine economists have sort to find ways of attracting investment in the Sub-Saharan continent but all studies failed.
The main reason why we fail to attract FDI into
this continent lies on the fact that we have no independence or autonomy to
control policy. A lot of our policies are prescribed to our governments by the
donor country or their institutions and they proved unworkable. Basally
economic model we are encouraged to implement does not work here in Africa.
Even though these sponsored policies fail to propel investments, their owners
are constantly imposing conditions on us for the sake of exploiting wealth
freely using African slave labor force. I think the Sub-Saharan Africa is in a
complete state of messy because of fierce opposition of by foreign on any form
of policy that seek promote economic activities. In this regard, we have lost
tough with our local economy to foreign investors (rulers) and as such FDI has
increasing become a political tool than business driven. Several times, we try
our own domestically designed policies, but they fail to subsist, our policies
are deemed unfavorable business.
A new thinking is needed especially amongst our leaders to establish or adopt home-grown economic policies that encourage both consumer spending and to provide framework that will eventual decrease foreign aid in the region. Surely we can not infinitively survive on western handouts. That’s where it is getting wrong because those who extend their hands to us will inevitably exploit the situation on their advantage. FDI is increasingly becoming a political tool for those advocates of creating instability among the African people. It seems as though a domestic policy is being denied a chance of survival because it is perceived as detrimental to foreign investments. Why should someone out there so concerned about our policies rather than indigenous inhabitants?
There is no doubt, FDI is now regarded as part of foreign policy by those who control the global economy, they have the power to stop or discourage their home firms /corporations not to invest in a particular country even though there it is a promising market.Politics is now controlling business activities and hence in conclusion as long western politics continue to dominate our markets in whatever way,this continent will remain trailing behind in terms of capital inflows.Let us develop our own system.
A new thinking is needed especially amongst our leaders to establish or adopt home-grown economic policies that encourage both consumer spending and to provide framework that will eventual decrease foreign aid in the region. Surely we can not infinitively survive on western handouts. That’s where it is getting wrong because those who extend their hands to us will inevitably exploit the situation on their advantage. FDI is increasingly becoming a political tool for those advocates of creating instability among the African people. It seems as though a domestic policy is being denied a chance of survival because it is perceived as detrimental to foreign investments. Why should someone out there so concerned about our policies rather than indigenous inhabitants?
There is no doubt, FDI is now regarded as part of foreign policy by those who control the global economy, they have the power to stop or discourage their home firms /corporations not to invest in a particular country even though there it is a promising market.Politics is now controlling business activities and hence in conclusion as long western politics continue to dominate our markets in whatever way,this continent will remain trailing behind in terms of capital inflows.Let us develop our own system.
