Foreign direct investment (FDI) into Africa is burgeoning and it is espoused as a panacea to unlock Africa's development. To effectively benefit from this FDI, African countries need to address three key structural impediments to development.
First, economically, at independence, many African countries inherited infrastructure that was developed for and suited to colonial trade (corridors of extraction). This meant railroads to ports, for export of raw materials to the colonial home countries. The infrastructure was not relevant for development of local industry and intra-African trade.
Second, politically, national boundaries were created based on natural resource sharing without due regards to ethnic boundaries that existed. This has contributed to challenge of nation state building and resultant flagility and conflicts in many African countries.
Third, institutionally, the laws and regulations of colonial administrators most of which were inherited by African leaders as a pact for independence agreements, were to a large extent, anti-African. For example, the statutory laws and institutional set up for land administration did not allow and favour,respectively, Africans to hold title to land on which they settled. The same was for business registration by African entrepreneurs.
These are fundamental structural hurdles that need to be addressed. To do that, there is need for long term planning that can be sustained beyond tenure of office of the seating president. The questions are, 'who' will sustain it and shield it from interest groups that are benefiting from the current status quo?
First, economically, at independence, many African countries inherited infrastructure that was developed for and suited to colonial trade (corridors of extraction). This meant railroads to ports, for export of raw materials to the colonial home countries. The infrastructure was not relevant for development of local industry and intra-African trade.
Second, politically, national boundaries were created based on natural resource sharing without due regards to ethnic boundaries that existed. This has contributed to challenge of nation state building and resultant flagility and conflicts in many African countries.
Third, institutionally, the laws and regulations of colonial administrators most of which were inherited by African leaders as a pact for independence agreements, were to a large extent, anti-African. For example, the statutory laws and institutional set up for land administration did not allow and favour,respectively, Africans to hold title to land on which they settled. The same was for business registration by African entrepreneurs.
These are fundamental structural hurdles that need to be addressed. To do that, there is need for long term planning that can be sustained beyond tenure of office of the seating president. The questions are, 'who' will sustain it and shield it from interest groups that are benefiting from the current status quo?
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