December 16, 2020

Kick-Starting FDI in Africa

Trustworthy and indepth news stories are more important now than ever.
Support our newsroom by MAKING A CONTRIBUTION HERE

To help catalyze growth and tackle extreme poverty, African leaders must try to attract hundreds of billions of dollars in foreign direct investment. They should emulate China and start by targeting the 165 million members of the continent’s diaspora.

NAIROBI, KENYA – 2020/10/13: A general view of traffic flow and construction on a section 2 of the Nairobi Expressway Project along Mombasa road. The Government of Kenya is constructing the Nairobi Expressway, a 27.1 km long toll highway meant to de-congest Nairobi by providing faster and reliable transport. The expressway is worth an estimated US$ 505.5 million and scheduled to be completed in 2022, its being funded by China under a Public-Private-Partnership (PPP) and built by the Chinese contractors, China Road and Bridge Corporation (CRBC). (Photo by Boniface Muthoni/SOPA Images/LightRocket via Getty Images)

LOMÉ/BOSTON – In the United Nations’ 2020 World Investment Report, Secretary-General António Guterres noted that global foreign direct investment (FDI) this year is “expected to fall sharply from 2019 levels of $1.5 trillion” to below the trough it hit during the global financial crisis. This decline will have a devastating effect on emerging economies, many of which are already in crisis as a result of the COVID-19 pandemic.

Few regions will struggle more than Africa. Not only does the continent account for just 3% of global GDP, but it currently attracts less than 3% of global FDI, which has been a critical factor in propelling other regions to prosperity.

To catalyze growth and potentially help to rid the continent of extreme poverty once and for all, African leaders must try to beat the odds and attract hundreds of billions of dollars in FDI. They should start by seeking investments from the 165 million members of the African diaspora. And they can draw inspiration from China’s meteoric rise to become the world’s second-largest FDI recipient, after the United States.

Economists and policymakers are well aware of the economic-development benefits at stake. In addition to providing emerging economies with a much-needed influx of capital, FDI is generally long term and drives local skills development and technology transfer. When international firms such as Apple or Tesla decide to build manufacturing facilities, distribution networks, retail stores, and service operations in China, for example, they provide employment, technology, and know-how to local Chinese, as well as opportunities for smaller businesses to supply large factories.

China’s path to attracting significant amounts of FDI began four decades ago, when Deng Xiaoping came to power and introduced market-based reforms. Some might assume that much of the country’s inward FDI has since come from non-Chinese investors and companies. In fact, according to Alan Smart of the University of Calgary and Jinn-yuh Hsu of National Taiwan University, Hong Kong accounted for half of the $307.6 billion in FDI that China received between 1979 and 1999, and Taiwan for roughly 8%. Overall, 77% of China’s total FDI inflows during this period came from Asia, while the US and European Union member states were responsible for just 16% combined. As one commentator has noted, “From the outset of China’s economic reform era, diaspora Chinese have provided the lion’s share of inward foreign investment.”

Early diaspora investors brought with them a unique set of strengths: close ties with the local population, an understanding of local customs, and, perhaps most important of all, a vested interest in China’s development. These advantages increased their projects’ success rate, which contributed to the country’s attractiveness to other investors. Soon, FDI skyrocketed: having contributed significantly to China’s rapid growth over the past four decades, and thus to lifting close to one billion Chinese out of poverty, $141 billion poured in during 2019, as foreign investors continued to bet on Chinese consumers’ growing demand for goods and services.

African leaders should seek to emulate China’s example. Diaspora Africans sent home $48 billion in remittances in 2019. Although this year’s total will likely fall below $40 billion, owing to the pandemic, African governments, investors, and entrepreneurs can reap the long-term benefits of having a vast diaspora by developing a viable strategy to attract inflows that support long-term development projects.

True, Africa will find it difficult to match China’s FDI totals. Global supply chains have already been established, the pandemic has devastated many African economies, and Africa, unlike China, comprises 54 sovereign states. But the continent may yet succeed with the help of government policies that – as in China – encourage diaspora investments in productive enterprises.

When it comes to increasing national prosperity, research shows that innovators are responsible for lighting the match, while governments fan the flame. Encouragingly, efforts to increase diaspora investment in innovative African projects are underway. One such initiative is Future Africa Collective (FAC), a members-only crowdfunding investment platform founded in January 2020 by the veteran African entrepreneur Iyinoluwa Aboyeji.

FAC aims to leverage the African diaspora’s financial, human, and social capital by connecting investors with Africa’s innovators. Specifically, the platform gives diaspora Africans and others an opportunity to invest a minimum of $5,000 in some of the continent’s most promising startups. So far, FAC has helped companies including Tambua HealthEvolve CreditBamboo, and Releaf to raise millions of dollars.

Aboyeji’s platform is just one example of how crowdfunding from a diverse group of investors is quickly gaining popularity in Africa. A recent report by AfricArena highlighted several startups that have successfully raised hundreds of thousands of dollars via similar platforms. China’s experience suggests that the key to jumpstarting FDI in Africa will be use these platforms to target diaspora Africans.

With COVID-19 continuing to take its toll on Africa, the continent’s prospects increasingly depend on members of the diaspora pooling their resources. Opportunities for innovation abound because a growing number of Africans lack access to affordable products and services that could improve their lives. With their networks, local know-how, and deep desire to see Africa prosper, diaspora Africans can build a strong foundation of investment that enables the region to attract other new sources of FDI and accelerate its economic growth.

Carl Manlan, a 2016 New Voices Fellow at the Aspen Institute, is Chief Operating Officer at the Ecobank Foundation.

Efosa Ojomo, Senior Research Fellow at the Clayton Christensen Institute, is a co-author of The Prosperity Paradox: How Innovation Can Lift Nations Out of Poverty.

The text has been adapted from Project Syndicate website

We can't do quality journalism without your support

Perhaps it goes without saying — but producing quality journalism isn't cheap. At a time when newsroom resources and revenue are declining, The Chronicles remains committed to "Serving Your Right To Know The Truth". Stand with us as we document Rwanda's remarkable journey for you and the future generation. Do you value our journalism? We can't do it without you. Show us with your support by CONTRIBUTING HERE.
Email your news TIPS to or WhatsApp +250788351327.
You can also find us on Signal


  1. Howdy! This is kind of off topic but I need some advice from
    an established blog. Is it difficult to set up your own blog?
    I’m not very techincal but I can figure things out pretty fast.
    I’m thinking about setting up my own but I’m not sure where to start.
    Do you have any ideas or suggestions? Many thanks

  2. Hi there everyone, it’s my first pay a visit at this web site, and piece of writing is
    truly fruitful in favor of me, keep up posting these types of posts.

  3. My developer is trying to convince me to move to .net from PHP.
    I have always disliked the idea because of the costs.

    But he’s tryiong none the less. I’ve been using Movable-type on a number of websites
    for about a year and am nervous about switching to another
    platform. I have heard very good things about
    Is there a way I can import all my wordpress posts
    into it? Any kind of help would be really appreciated!

  4. The average bitcoin transaction fee is $ Luckily, there are ways to cut costs. There are ways to save some sats. Bitcoin miner fees are small amounts of bitcoin given to incentivize bitcoin miners (and their operators) to confirm bitcoin transactions. Bitcoin miners are the special pieces of hardware that confirm and secure transactions on the bitcoin network. Miner fees pay miners for the service they provide. With governments and central banks in full stimulus mode, some observers reckon bitcoin is a useful safeguard against inflation – with supply capped at 21 million, its scarcity gives it an innate value. In the following section, we will show you some of the best cricket betting sites in India. After you pick a site, you need to create an account and start placing bets. Read ahead to understand the process step-by-step Casino Panda Cost-of-living protections were reinstated to the contract amid workers’ concerns that wage increases wouldn’t cover higher living expenses.4 min read En continuant à utiliser le site, vous acceptez l’utilisation des cookies. Plus d’informations Accepter You can even market giving ins to increase even more cash. Burning Stars Maecenas ultrices vestibulum metus, eget laoreet justo pretium vel. Aenean cursus luctus congue. Morbi rutrum rutrum leo, ut aliquet justo congue id.lacinia feugiat velit, nec imperdiet lectus. Integer ut venenatis massa, nec porta arcu. In dapibus leo eget fringilla lobortis. Donec scelerisque mi nec lectus dictum pellentesque. Ut quis tempus sem. Sed sed tellus a arcu pulvinar tempus nec ac risus. Curabitur vitae lorem vitae arcu aliquam eleifend ut eu dolor. Sed tincidunt sagittis enim, consectetur scelerisque mauris rhoncus non. Vivamus tincidunt felis eu nunc volutpat.

  5. 1 Pecho: se mide sobre la parte más ancha del pecho y con un sujetador puesto de la talla adecuada.  Después de seleccionar Detectar ubicación actual, se abrirá una ventana de solicitud de permisos. A continuación te aparecerán las tiendas más cercanas a tu ubicación. Las tallas de pantalones de mujer pueden variar según la marca y el país, por lo que es importante conocer las diferentes equivalencias de tallas para evitar confusiones. Algunas de las equivalencias de tallas más comunes son: Para hacerlo fácil, os contamos dos maneras de poder saber la talla en centímetros que es el sistema propio de países como Francia o España. Talla de la 32 a la 48 : You are using an outdated browser. Please upgrade your browser to improve your experience.
    ¿Te gustaría que tu bandeja de entrada tuviera más estilo? Suscríbete a nuestra newsletter. Descubre las novedades en el mundo de la moda, la belleza y la decoración del hogar. Además, recibirás bonus vouchers, ofertas de cumpleaños, descuentos adicionales en rebajas online e invitaciones especiales a eventos, directamente en tu bandeja de entrada. Para más información de este producto visita: TuSaludIntima Utilizamos cookies propias y de terceros para ofrecer un mejor servicio a nuestros clientes y con finalidad analítica. Si continúas navegando, consideramos que aceptas su uso. En Goro Men’s Store trabajamos solamente con marcas exclusivas europeas de alta calidad y cada vez son más las personas que confían en ellas: Natural luxury, Casall, Hanro, Hom, Homers, Huber, Marco Pascali, Natural World, Skiny, Wolford y mucho más! Descubre nuestro outlet de ropa interior para hombre.

  6. Just desire to say your article is as astonishing. The clarity in your post is simply cool and i can assume you
    are an expert on this subject. Fine with your permission allow me to
    grab your RSS feed to keep up to date with forthcoming post.
    Thanks a million and please continue the enjoyable work.

  7. Heya i’m for the primary time here. I came across this board and I to find It truly helpful
    & it helped me out a lot. I am hoping to give one thing back
    and aid others like you helped me.

  8. Transform Your Online Earnings with the Rapid Profit Machine!

    Unlock the secret to online success with this FREE revolutionary system by James Neville-Taylor.
    Say goodbye to guesswork and hello to proven results.

    Key Benefits:
    * Proven Success Stories
    * Zero Cost, Maximum Value
    * Ideal for Beginners and Veterans
    Don’t miss out! Limited time offer with $4,715 worth of bonuses absolutely FREE.

    Start Your Success Journey Here
    Act now and be the next success story!

  9. I loved as much as you will receive carried out right here.
    The sketch is attractive, your authored material stylish.
    nonetheless, you command get bought an shakiness over that you wish be delivering the
    following. unwell unquestionably come further formerly again since exactly
    the same nearly a lot often inside case you shield this increase.

  10. You can email the site owner to let them know you were blocked. Please include what you were doing when this page came up and the Cloudflare Ray ID found at the bottom of this page. You can email the site owner to let them know you were blocked. Please include what you were doing when this page came up and the Cloudflare Ray ID found at the bottom of this page. You can email the site owner to let them know you were blocked. Please include what you were doing when this page came up and the Cloudflare Ray ID found at the bottom of this page. You can email the site owner to let them know you were blocked. Please include what you were doing when this page came up and the Cloudflare Ray ID found at the bottom of this page. You can email the site owner to let them know you were blocked. Please include what you were doing when this page came up and the Cloudflare Ray ID found at the bottom of this page.
    WSN is a leading source for all things online gambling and casinos. We have a dedicated team of experts who have worked in and around the gambling industry for years, learning everything there is to know about casinos and sports betting. Our team spends hours checking every little detail of the online casinos we review, providing in-depth, unbiased, and honest reviews. If a new online casino launches in the US, you better believe our team are already working on it and writing up their thoughts. Wildcasino is one of the best online gambling websites. Wild Casino aims to improve your online gaming atmosphere with its unique site. Wild Casino began operating online in 2018, making it one of the sector’s oldest casinos. Everygame is one of the leading online gambling sites in the iGaming industry, partnering with some of the best developers to feature a wide range of games. This operator is better than most casino sites because of its progressive jackpot game selection.