High profits for foreign investors

Foreign investments in Africa have been consistently more profitable in recent years than in most other regions of the world, a new UN report says. The report by the UN Conference on Trade and Development (UNCTAD) - 'Foreign Direct Investment in Africa: Performance and Potential' - says that the rate of return of American investments in Africa, for example, has since 1991 been higher than in any other region, including developed countries. It says many African countries have made considerable efforts over the past decade to improve their investment climate, such as increasing the role of the private sector, reducing inflation rates and budget deficits, providing tax and other incentives, strengthening the rule of law, and becoming parties to international agreements dealing with foreign direct investment. Twenty-six of the 32 least-developed countries in Africa covered in a 1997 survey had "a liberal or relatively liberal regime for the repatriation of dividends and capital", the report adds. "Too often Africa has been associated only with pictures of civil unrest, starvation, deadly diseases and economic disorder, and this has given many investors a negative picture of Africa as a whole." But, the report goes on, this is "not a true picture of the majority of African countries". Partly as a result of a negative image and in spite of high profit potential, investment flows into Africa remain relatively low and totalled only US $9 billion in 1997, less than what was received by Singapore alone, according to the report