Despite African governments’ efforts to attract Foreign Direct Investment (FDI) into their food and agriculture sector and the counter-criticism this has provoked, surprisingly little research has been conducted to better understand the scale and impact of these investments. Such information is crucial to be able to harness FDI as a tool for poverty reduction and development, including where investments flow, what drives them, and their long-term effects on the local population. Related research at ZEF has highlighted a number of key insights:
- FDI flows into Africa’s food and agriculture sector come from diverse sources and are less concentrated than is often thought.
- FDI projects in the food and agriculture sector are implemented mainly to serve local and regional markets.
- Areas with larger supplies of agricultural land, higher population density, better infrastructure, regulatory quality and previous investment projects are more likely to attract FDI in this sector.
This policy brief is based on the study: Husmann, C. and Kubik, Z. (2019) Foreign direct investment in the African food and agriculture sector: trends, determinants and impacts, ZEF-Discussion Papers on Development Policy No. 274. Center for Development Research, University of Bonn.