The Geography of Foreign Direct Investment in Africa: Mid-Point for the UN Millennium Goals of 2000

This paper examines the geographic determinants of foreign direct investment (FDI) into Africa since the UN Millennium Development Goals (MDGs) declaration in 2000. We examine data through the MDGs’ mid-point of 2007, underscoring FDI’s importance with regard to Goal Eight: “Global Partnership”. While existing literature sheds light upon the importance of macro-level economic, social, and political variables, this paper contributes comprehensiveness by employing a combined methodology of OLS regression and factor analysis. We find that Africa’s uneven FDI landscape is a result of natural resource endowments, which in turn reflect export patterns. To a lesser extent, market size is found to be a significant determinant, as are follow-the-leader strategies among British Commonwealth states. Building upon a growing literature on transparency, we find little evidence, especially in landlocked countries, that FDI is promoted by the adoption of International Accounting Standards. This observation, plus the positive role of Internet access, yields suggestions for government policy and the allocation of international aid.