Foreign direct investment (FDI) is both necessary and important for Africa’s economic transformation and growth, an economic expert said on Wednesday.
Grayson Koyi told Xinhua in an interview that FDI augments local resources and helps to invest into the future because it promotes technology transfer and knowledge spillover resulting in increased productivity and improvements in efficiency in resource allocation.
Koyi, who is deputy director at the University of Zambia Institute of Economic and Social Research, said FDI is necessary particularly for Africa because of the evident gaps in terms of available capital stating that the continent is lagging behind on a number of capital fronts.
“As a useful starting point, we need foreign direct investment to transform our natural resources into products that are of high value. In the context of Africa, admittedly there are resource gaps in terms of available capital to be able to bring about the desired economic transformation. Africa needs FDI that is going to address gaps in knowledge, technology and physical capital,” he said.
He further pointed out that countries will always have resource gaps at local level and that this is the reason why they may want to have recourse from elsewhere that might be available.
“Foreign direct investment comes in to fill the gaps in domestic resources. There is no country that has developed without the input of foreign direct investment,” he explained.
He was quick to mention the need to ensure that such investment also helps to grow local business promote the interests and aspirations of the people on the continent.
“There can be no denying that Africa needs such investments. But we need to be able to see how best to government this kind of investment so it is working to the benefit of Africa that it in the end it is a win-win situation for everyone involved,” Koyi said. Enditem