Investment and Trade Rules: Increasing the Stock of African Foreign Direct Investment Flows

Trade can be a powerful engine for development. But harnessing trade for development in Africa requires investment to foster lasting economic transformation. Investment, therefore, is key to unlocking the potential of trade-led growth. While flows of foreign direct investment (FDI) into Africa paint a familiar picture of the dominance of extractive industries, the reality is more nuanced and promising. The fact that FDI stocks in Africa are geared towards the burgeoning services sector offers immense potential for countries in Africa to access and climb regional and global value chains; however, unless interrelated policy challenges are addressed, Africa will not be able to optimize the benefits of FDI. Combined with efforts at national and regional levels, the WTO should be better used by African countries to properly exploit the trade-investment nexus for the achievement of the United Nations’ Sustainable Development Goals.

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