This paper examines the crowding out or crowding in effect of foreign direct investment inflow on domestic investment in Africa. Data for the period 1970-2008 were extracted from the UN statistical online database and the World Development Indicator 2009 online database and the study employed a recent panel cointegration estimation technique. The study revealed that foreign direct investment inflow crowds out domestic investment in the ECOWAS region. The study therefore recommends that policy makers in the ECOWAS countries focus on promotional resources to attract some types of foreign direct investment and regulate others. Policies should also be directed at putting in place a better targeted approach to screen foreign direct investment applications to ascertain their productive base before allowing them. [ABSTRACT FROM AUTHOR]
The article focuses on manufacturing investment in four African countries, Cameroon, Ghana, Kenya and Zimbabwe, in which financial markets have been heavily controlled. During the 1990s per capita GDP has declined in Africa generally at 1.8 percent per annum, whereas in other developing areas it has grown by 4.4 percent according to the World Bank. All the four countries included in this article faced difficulties in their macroeconomic environment that had important implications for the performance of the manufacturing sector. Ghana has seen a sustained reversal of poor economic performance. Economic performance in Cameroon deteriorated dramatically in the period from the mid 1980s. Kenya is the only country which has seen a long term sustained growth of per capita income. In Zimbabwe per capita GDP has fallen at a trend rate of 0.4 percent per annum over the period from 1971. In Zimbabwe a structural adjustment program was adopted in 1991. The conclusion that can be drawn is that most important factor adversely affecting investment is the high capital costs facing the firms which are reflected in their high profit rates.
Since the 1960s economic growth rates have been far lower in sub-Saharan Africa than in other developing regions. This poor performance has resulted primarily from endemic rent-seeking and the over-regulation of markets. To achieve high growth rates, African countries must improve the investment climate by reforming institutions, enhancing infrastructure and protecting property rights. [ABSTRACT FROM AUTHOR]
The MDGs are being misappropriated to gain support for a specific development strategy, agenda or argument, mostly being used as a call for more aid or as a Trojan horse for a particular policy framework. As relative benchmarks, they are extremely difficult to meet in countries with low human development. Their misinterpretation as one-size-fits-all targets is leading to excessive Afro-pessimism, begging the question whether Africa is missing the targets or whether the world is missing the point. The global MDG canon is dominated by a money-metric and donor-centric view of development, and is not ready to accept that growing disparities within countries are the main reason why the 2015 targets will be missed. [ABSTRACT FROM AUTHOR]