Africa Barack Obama Democracy Human Rights Violations Leadership President Mugabe USA-Africa Summit

Mugabe, the international outcast?

By Makusha Mugabe

old Mugabe
Obama won’t invite Mugabe to USA-Africa Summit, regardless of him being AU vice-chairmen and incoming SADC chairman.

Unlike the European Union which was blackmailed by the Mugabe regime to invite him to the EU-Africa Summit, which he then embarrassed them by not attending because his wife was not invited, the US is brooking no nonsense and has told Mugabe in no uncertain terms that he is not welcome.

This report by the Brookings Institute shows how insignificant Zimbabwe has become in terms of foreign direct investment in Sub-Saharan Africa and why President Obama has no compulsion to reverse the non-invitation of Mugabe, despite him being an AU vice-chairman and incoming SADC chairman.

It shows that Foreign Direct Investment (FDI) to Sub-Saharan Africa has increased substantially from over $33.5 billion in 2000 to $246.4 billion in 2012, with the EU, China, Japan and the U.S accounting for approximately 54 percent of the stock of FDI in the region in 2012.

But the FDI in-flows into sub-Saharan Africa are highly concentrated in only a few countries; South Africa and Nigeria being the top recipients of FDI flows from China, the EU and the U.S.

The top destinations for U.S. FDI flows in the region are Nigeria (37 percent), followed by South Africa (17 percent) and Mauritius (16 percent). For the EU, South Africa comprises 68 percent of its FDI flows to sub-Saharan Africa while for China, South Africa receives 35 percent of its flows.

For Japan, South Africa is also the top recipient (with 68 percent of flows), but Mauritius (22 percent) and Liberia (7 percent) each receive sizable shares as well.

Predominantly resource-rich countries—South Africa with its precious metals and minerals as well as Nigeria with its oil reserves—receive a majority of FDI, indicating that natural resources remain a significant factor in attracting investors to the continent.

Zimbabwe is only mentioned in the context of poor governance which inhibits investment in such countries. The report says, investing in countries with relatively higher governance performance reflects concerns with the investors’ level of risk aversion, the pursuit of democratic principles or non-ideological relationship based on non-interference, and the level of pressure from global consumers, who are increasingly scrutinizing their choices along the global value chains according to the respect of governance indicators, such as respect for human rights.

Indicators produced in 2012 which cover six dimensions of governance – voice accountability, rule of law, government effectiveness, political stability, regulatory quality, and control of corruption showed that in 2012, Botswana and Mauritius topped the list with a score of governance performance of 0.71 and 0.66 respectively, while Zimbabwe and the Democratic Republic of the Congo (DRC) were at the bottom with a respective score of -1.35 and -1.74.

South-South investment into the region included South Africa (9 percent), Singapore (6 percent), India (5 percent) and Mauritius (5 percent).

The growth in FDI was mainly driven by China, whose FDI grew at an annual rate of 53 percent, compared with 29 percent for Japan, 16 percent for the EU (France (38 percent), the U.K. (31 percent), Germany (8 percent), Belgium (8 percent)—accounted for over 80 percent of the EU’s share of FDI stock in the region) and 14 percent for the U.S.
Less than 1 percent (0.7 percent) of the U.S.’s global FDI stock abroad is destined for the region, as the US S primarily invests its $367 billion of FDI in Europe (55 percent), Latin America (13 percent), Canada (8 percent), and other developed countries such as Australia, New Zealand, Israel and Japan (13 percent collectively).

Similarly, the EU and Japan direct only 0.8 and 0.2 percent of their FDI, respectively, toward sub-Saharan African countries abroad. China, on the other hand, invested 3.4 percent of its FDI stock abroad in the region in 2012.

FDI flows to sub-Saharan Africa are highly concentrated in only a few countries; South Africa and Nigeria are the top recipients of sub-Saharan Africa-bound FDI flows for China, the EU and the U.S. The top destinations for U.S. FDI flows in the region are Nigeria (37 percent), followed by South Africa (17 percent) and Mauritius (16 percent). For the EU, South Africa comprises 68 percent of its FDI flows to sub-Saharan Africa while for China, South Africa receives 35 percent of its flows. For Japan, South Africa is also the top recipient (with 68 percent of flows), but Mauritius (22 percent) and Liberia (7 percent) each receive sizable shares as well.

Predominantly resource-rich countries—South Africa with its precious metals and minerals as well as Nigeria with its oil reserves—receive a majority of FDI, indicating that natural resources remain a significant factor in attracting investors to the continent.

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