Foreign Direct Investement In Africa: Creating Sustainable Development Or Not?

In the past decade, Foreign Direct Investment in Africa (FDI) has increased constantly,creating economic, social and environmental impact into the respective host country. FDI consiston an investment made by a foreign country in a given economy. It consists on investing directlyin existing projects or creates new projects, where they are called “Greenfield investment”.Companies choosing direct investment in a given country tend to have more influence toward thehost company. This allows the investors to have increased control over their investment.In order to shed light on the purpose of this study, which is the sustainable developmentof Africa, we will present in the first chapter the background, significance and the objective ofthe study, then the first chapter is also composed by the literature review relating previous workfocused on FDI theories, empirical study of FDI, FDI in Africa and the environmental impact ofFDI in the host country, also this chapter includes the main contents of the study and themethodology and closed with the presentation of the structure of the study and the highlights ofmain findings Then on Chapter two, is composed by the FDI theory on sustainable development,general introduction of Africa and overview of FDI in Africa. This part will be followed by thethird chapter treating on the economic impacts of FDI in Africa, measuring the benefits and thecosts of FDI to the host countries with individual country level data. Then the fourth chapterconcerns the social impacts of FDI into the host population, sustained with individual countrylevel case. The last part of the study is dedicated to the author’s point of view and relatedsuggestion on addressing the key constraints presented throughout the dissertation.As observed throughout the study using quantitative and qualitative resources to sustainarguments, it is proven that FDI does have short term positive economic impact into the hostAfrican countries; it is a contributor to growth speed but its long term sustainability is not certain,and the social aspect has experienced sustained evolution over the past decade despite the socialissues that FDI creates. Regarding the ecological impact into the environment the miningindustry brings the largest burden into the ecosystem as this sector has been the main source ofFDI when Africa started to open its door to foreign investors.