Open for Business? A Comparative Analysis of Investment Promotion in Sub-Saharan Africa
About the Project
Although modern-day supply chains for consumer goods, agricultural products and industrial inputs span the entire planet, the African continent has remained at the margins of an increasingly globalized world. Recognizing the need for change, national governments play a key role in promoting economic activity in sub-Saharan Africa. In an effort to attract private sector actors, states devise sophisticated investment promotion policies and fund specialized agencies to foster business ventures. These processes raise important questions for researchers and policy makers alike. Many of them disagree with one another as to how the abstract ideal of ‘development’ can be achieved. Is it contingent upon boosting economic indicators such as gross domestic product, capital flows and growth rates? Does excessive investment promotion pose a threat to sustainable development? Should markets or governments be left in charge? Do controversial ventures—from large-scale land acquisitions and mining claims to mega-infrastructure projects—contribute positively to development in Africa or do they impede it? The challenge of finding the crucial balance between market-based incentives and legal regulations for the private sector is reflected in today's diverse policy landscape.
Yet, to date, no systematic effort has been made to map and compare the content of the latest generation of investment policies in order to assess their impact on the social, economic and environmental development of sub-Saharan Africa. This project seeks to fill the empirical gap. Documenting the continent’s rapidly changing investment climate is critical to understanding Africa’s development pathway in the 21st century. The main objective of this research is to conduct a comparative policy analysis and a systematic classification of 46 African investment promotion regimes. More specifically, it will scrutinize the incentives states offer to potential investors and the conditionalities they mandate for investors to access the stipulated benefits. The research responds to SSHRC’s call for knowledge generation about contemporary global governance systems. More specifically, it addresses Future Challenge Area 12 by exploring changes in the relationship between nation states and influential non-state actors that transcend traditional notions of sovereignty.
The analysis is timely as more than 25 African countries have reformed their investment policy landscape over the last ten years. The focus of existing research into investment policies in sub-Saharan Africa has been the in-depth study of single countries or comparisons of a small number of cases. The aggregation of cross-country data will allow for much-needed insights on a larger scale. This project will provide both a detailed picture that enables an accurate comparison of countries as different as South Africa and Chad, and a simplified visualization of overall findings in a comprehensive two-dimensional matrix.
The intended contributions of this project are threefold. First, it seeks to advance scholarly research. The study will yield a descriptive framework that establishes a sound basis for future investigations into the causes and consequences of the existing variation in African investment promotion strategies. Second, it aims to inform policy making and policy practice. Outputs are targeted at a specific network of civil servants and government officials who are connected via the World Association of Investment Promotion Agencies. Third, the training of students is an essential component of the proposed study. A team of undergraduate and graduate research assistants will gain valuable methodological and professional skills that complement their academic course work.