Critical Investments in Africa: Beyond Poverty Alleviation

Tapan K. Panda

Abstract


African economy is on a rise. Most of these countries are at peace. It has never experienced such a growth opportunity in last fifty years. The life expectancy is on a rise as deaths due to HIV have gone down drastically in many parts of Africa. Common African’s life expectancy has gone up by a tenth and foreign direct investment has tripled in last decade. It is expected that consumer spending will almost double in the next ten years. The number of countries with average income above USD1000 per person a year will grow from less than half of Africa’s 55 states to three quarters. This is an interesting phenomenon to study and analyze. This research paper is based on the context of such a dramatic change in the fortune of African nations and identifies the reasons for such phenomenon. Research reveals that the current growth is sustainable as western aid agencies have focused on capacity building than dumping material waste in the name of development support. Chinese investments in the mining and petroleum sector have also contributed to flow of foreign capital into African states. This research paper focuses on growing trend in Africa and analyzes the current investment patterns in various sectors in Africa. This paper focuses on investments in non-fuel sector and tries to map the pattern of investments across Africa. The paper puts both the arguments in favor of foreign direct investment and its consequences and identifies the warning signals where the investments may lead to some sort of invasion of dwindling African nations.

Keywords: Foreign direct investment, Energy security, Low cost market, Chinese investment, Paradox of growth and sovereignty and sustainable development


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