The Potential Of Africa's Global Economic Integration

2458 words - 10 pages

Africa has long been thought of as a place where trade could not happen, especially on an international level. In recent times however, there has been a push to create more integration among African nations. These nations have realized the benefits which occur when firms are freely able to engage in investment from country to country moving away from the old protectionist policies of earlier years. As the textbook Global Business explains, these policies have, on numerous occasions before, triggered “retaliation that further restricted trade” (Peng, 2009). Governments there have also tried their hardest to change the image in the media of the continent and send signals to the public saying that they are indeed open to trade. To do so, they have used a series of tactics to push towards a more business-friendly continent. Many have shifted to being democratically elected governments focusing on the country and not just the ruling family. In addition, new laws have been implemented to combat corruption in an attempt to gain more integration. Many of their efforts have been successful and these efforts have made it attractive to do business there. With countries like Ghana experiencing economic expansion of a record 13.6% in 2011 and an overall growth rate of 6% for countries in the continent in 2012 (The Economist, 2011), well above that of any rivaling Asian country, it is paramount that regional and global integration occur and other regions and international nations take advantage of opportunities available. Some companies and countries have recognized the huge potential for trade and investment in Africa and are starting to get involved; for example China, who are choosing to accept the risk in exchange for profits, are becoming very successful there. As of 2008, Chinese outward foreign direct investment (OFDI) had grown to $515 billion dollars up from $40 billion in 1980 (Shen, 2012). It is difficult to believe that China would increase their investment if the continent were unprofitable. Despite this example though, many more countries and companies have not started investing. This paper will highlight the issues which have played a role in affecting the amount of investment which has occurred from foreign investors that lead to global integration. Three of these problems include media coverage, political instability, and corruption. These problems have made it appear virtually impossible to invest in the countries of this continent and made doing so “taboo” in the business world or the unenlightened investor. The continent is actually one of the most valuable and changes in policy as well as growing trends towards more stable governments are becoming the norm. Africa is not an easy region to start up and grow, but despite the issues that have been named above it is possible that, with creative, visionary leadership and a firm understanding of various cultures from country to country on the continent, there are numerous opportunities...

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