Analyzing the Impact of Chinese FDI Africaa and Ghana - Research Paper Example

The large influx of foreign direct investment of the developed countries of the world has largely impacted the positive economic development in these regions as well.  As such, it is important for the developing countries of the world to attract foreign direct investment as a way to spark production and manufacturing capabilities within the country, while hopefully benefitting the region as a whole in terms of economic development. Foreign direct investment is not easy to attract. Because such sources of capital often come from individuals or companies, stakeholders involved expecting a reasonable return on their investment, along with management and control interests with minimal risk.

This is even more important when the source of foreign direct investment comes from a country that must answer to the local taxpayer. In such situations, concessions will need to be made to ensure that the investments are properly handled and become beneficial for both parties. Unfortunately, the developing countries of the world often lack political stability to make this happen. In addition, there are logistical, cultural, and economic barriers that cause many investors to be hesitant when asked to provide direct aid to a particular country or region.

In order to open up opportunities, countries such as those in Africa will need to examine existing economic policy and find ways to make the investment in their countries more attractive moving forward. Ghana and Nigeria serve as the focus for this project because of the complementary economies. In addition, they are two developing nations that have seen recent success in attracting foreign direct investment. In order to provide a model for other developing nations to observe, it is important to determine the benefits that are being realized from these increased investments and what has been done to further spark the economic growth in the region.

The country of focus, from an investment standpoint, is China. China has been willing to fund various projects within this West African region, in exchange for benefits received back home.