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- Drivers for Boosting Intra-African Investment Flows Towards Africa’s Transformation
- Chapter
Conclusions and policy implications
- Author: United Nations Economic Commission for Africa
- Main Title: Drivers for Boosting Intra-African Investment Flows Towards Africa’s Transformation , pp 39-41
- Publication Date: November 2020
- DOI: https://doi.org/10.18356/cd645cb1-en
- Language: English
The study has been aimed at contributing to the understanding of the drivers of intra-African investment at the continental, subregional and regional economic community levels. The research reveals that three sets of variables clearly determine the dynamics of intra-African investment. First, trade openness appears to have a positive and significant impact on investment. This result corroborates what is established primarily in the literature that inward FDI openness tends to have a significant association with both backward and forward integration. From this perspective, countries may need to consider that boosting intra-African investment could also bolster the regional integration agenda at the regional economic community level and provide opportunities for alignment with the continental integration agenda. Second, quality and the development rate of infrastructure are key to explaining investment inflows. Lastly, the performance of trade logistics and the business environment have a bearing on attracting investment. From a policy perspective, these results point to both industrial and trade policies having the potential to boost investment in Africa, if properly designed. This is consistent with ECA research that shows that the benefits brought by enhanced intra-African trade through the African continental free trade area can offer better opportunities for industrialization (Economic Commission for Africa, 2015 and 2016).
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