Young Real Estate Investor | Info

The economic stirring of the African continent began in the early 1990's through a series of serious structural reforms and improvements in economic management. Important changes were brought in through legislation to develop the private sector by offers of incentives. It is not that risks of doing business in Africa, such as sudden regime changes, violence and logistical nightmares, has disappeared. They remain, but lure of high returns compensate for the risks.

Role of Foreign Direct Investment (FDI)

The physical investment by a company from one country in another country is known as Foreign Direct Investment or FDI. Such investment could be in factories, land and mines. The parent enterprise who invests in the foreign land also has some control over it's foreign affiliate. The parent enterprise and the foreign affiliate form an international business or multinational corporation, popularly known as MNC. The FDI is a measure of foreign ownership of productive assets.

Traditionally developing countries have depended on the developed countries for trade and investment. The developed countries act as a source of foreign capital to the capital scarce developing countries. This often mean an unequal distribution of economic power in favor of the developed countries leading to exploitative behavior in terms of extraction of raw material from the developing countries and to use them to produce and export manufactured goods back to them at huge profits.

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