How can developing countries attract foreign direct investments?
Loading...
Date
2021
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
Developing countries are increasingly reliant on foreign direct investment (FDI) to finance
development. Yet, despite increased spend on investment promotion, these countries
consistently achieve a smaller share of the FDI pie than developed countries. To understand
how developing countries can achieve a greater share of FDI this study examined the efforts
of the Mozambican Investment Promotions Agency (IPA), how they tackle investment
promotion and how they have performed versus global best practice, their ambitions and the
expectation of investors. Through document review, quantitative analysis and qualitative
interviews the study shows that Mozambique has had a mixed performance at attracting
quality FDI in line with their stated ambitions. It provides insight into the cost of a poor
investment climate when it comes to FDI and investment promotion and the importance of
tackling the hidden costs of corruption and additional costs from disorganized value chains. It
also shows that the IPA will need to modernize its approach should it want to achieve its
ambitions. This requires becoming a more proactive business insight partner for investorscapable
of project design and development- and one that carries out more nuanced, focused
investor targeting.
Description
Masters Degree. University of KwaZulu-Natal, Durban.