ANALYSIS >>

With abundance natural resources and cheap labour, African countries and other developing economies have the potential to attract multibillion dollar investments to their respective lands. In fact the United Nations Conference on Trade and Development [UNCTAD] revealed at the event that the FDI to Africa and other developing countries may hit $850billion this year with Mozambique and Congo Republic having the large chunk of the investments.

The global FDI which rose by 40 per cent to $1.8 trillion in 2015 contracted to $1.5trn last year, but expert said it would rise again this year.

Mukhisa Kituyi, the UNCTAD Secretary General, said financial experts expected flows into Africa to increase this year, the highest optimism of any region.

Kituyi said the likes of South Africa, Angola, and Nigeria would be readily recognised as top home economies for outward flows, but Mozambique and Congo Republic would see more of investments than many others on the continent.

FDI into the developing countries has been on the steady rise since 2015. FDI flows into developing economies reached $707 billion in 2015 from $681 billion in 2014.

He said Nigeria had invested more than $1.3 billion in greenfield projects in other countries, while until recently it was the largest host country for FDI on the continent.

He didn’t give reasons why Nigeria’s FDI drive plumped but the Chairman of Abu Dhabi Global Market [ADGM] said developing countries lose investors’ confidence when they fail to have stable economic policies and are affected by insecurity. Until recently, Boko Haram has dented Nigeria’s image and scared away from the country a number of foreigners.

The UAE Minister of Economy, Sultan Al Mansoori said the emerging markets should brace up as they compete with advanced economies to attract global FDI.

“To succeed in their efforts, they need to understand how FDI in different sectors is driven by different motivations, requiring differentiated policy mixes in order to maximise FDI’s potential benefits”, he said.

Al-Mansoori said the growth witnessed in 2015 did not translate into equivalent expansion in productive capacity across the world because most countries did not put in place concrete reform agendas for a more competitive economy.

“In order to absorb the positive spillovers that can be achieved through FDI, such as job creation, skill and knowledge transfer, nation must work to create a clear vision and concrete reform agendas”, the UAE senior official said.

Signs of return to positive growth were already emerging with increase in investments witnessed in many economies, the experts said.

Kituyi the increase investment in Greenfield projects across the world is already helping many developing countries.

The UNCTAD boss however cautioned countries that bad economic policies, high tax or multiple taxes and lack of trust could halt this positive growth.

The undersecretary, Abu Dhabi Department of Economic Development, Sheikh Khaleefa Saleem Al Mansoori, advised the developing economies to diversify in order to attract more Foreign Direct Investment [FDI].

He said stable economic policies and security played crucial roles in attracting FDI to a country.

The President of Republic of Tatarstan, Russian Federation, Rustam Minnikhanov, said his country was boosting its economy with ICT and human development. He advised other countries to do same.

The co-author of World Economic Forum’s Competiveness Report, Xavier Sala-i-Martin said FDI which doesn’t create adequate jobs would make nonsense of the economic gains therefrom. He said different types of FDI generate different kinds of jobs and thus a different impact on the development of the local economy.

“It begins with the government's vision and strategy for foreign investment, the policy decision that the country makes about how it will attract, regulate and engage with foreign investors’’, he said.

The President, Invest in Parana Agency, Brazil, Adalberto Netto said it had been proven that investment in agriculture always lead to provision of employment and increase GDP. He said this was because the sector was a major provider of work in rural areas with high populations.

The CEO of Dubai FDI, Fahad Al Gargawi said his Dubai has been using FDI to strengthen its economy and enhance its competiveness, thus reducing its dependency on FDI. He advised developing countries to jealously guard its FDI and manage it effectively.

While examining whether or not incentives policies have been attracting investors, the director of trade in services at World Trade Organisations, Hamid Mamadough argued that incentives policies should be optimised to not only secure inward investment but also to develop sustained competitiveness. He said though free zones and other financial incentives have been considered the key tool to attract FDI in many countries, many developing economies have not benefitted from this. He advised governments to design these incentives to their advantage, not to that of investors.

AIM is recognized as the world leading platform where business strategic networking and investments promotion take place.

The 7th AIM which held between April 2 and 4 focused on Foreign Direct Investment (FDI) in the global markets.

It gathered together financial experts, heads of governments, economists, ICT experts and businessmen and women from across the world, and has Daily Trust Newspapers among its media partners.

The year’s AIM shed light on the special contribution of FDI to the competitiveness of host countries. It also explored the special characteristics of foreign firms that enhance the degree to which they contribute to the competitiveness of their host nations.

He didn’t give reasons why Nigeria’s FDI drive plumped but the Chairman of Abu Dhabi Global Market [ADGM] said developing countries lose investors’ confidence when they fail to have stable economic policies and are affected by insecurity. Until recently, Boko Haram has dented Nigeria’s image and scared away from the country a number of foreigners