The AfCFTA – implications for Africa’s investment landscape

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The AfCFTA – implications for Africa’s investment landscape

The AfCFTA – implications for Africa’s investment landscape

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Working Papers ~ Talkmore Chidede

Foreign investment is essential for the economic development of African countries. Public investments and domestic investments are not enough to achieve social and economic development objectives. African countries need private capital injection (from domestic and foreign firms) to achieve their development goals. If properly managed, good and quality foreign direct investment (FDI) will help Africa to tackle poor economic growth and lack of development, unemployment and abject poverty. It will also transfer advanced technology and know-how into the continent.

African governments are keen to attract FDI. African nations have individually and collectively used several initiatives to attract foreign investment. Despite these initiatives, investment flows to the continent are still at low levels. Also, there is little or no evidence of development benefits in countries that have received increased investment flows. Why are some African countries failing to attract foreign investment? Why is the inward foreign investment not contributing to the development of Africa?

This Working Paper discusses how the establishment of the African Continental Free Trade Area (AfCFTA) could become a useful investment strategy for Africa. The Working Paper reveals that the AfCFTA – if well implemented – could position the African continent as an attractive investment destination through lowering investment barriers and improving investment governance in Africa.


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