The fall of investment in Africa in recent years

Abstract

This document presents The fall of investment in Africa in recent years, therefore, Recovery of investment is crucial to a long-term improvement in economic performance in Africa. Economic reform has not, however, brought a significant increase in investment. In some countries the investment ratio has marginally improved. However, in almost all African countries it remains far below its peak levels of the mid-1970s (see figure II.6). Several factors have contributed to this. First, profit or net income expectations have been low because of a generally weak economy and declining export commodity prices. Secondly, the poor and deteriorating state of infrastructure in many countries has driven up the costs of private investment. Present levels of public investment in many countries are insufficient to reverse this and are unlikely to increase significantly because of fiscal adjustment.2/ In countries such as Burkina Faso, Chad, Ghana and Guinea, public investment levels have increased or been maintained largely owing to external finance.