NEPAD: Drawing Lessons from Theories of Foreign Direct Investment (New Partnership for Africa's Development‪)‬

Abstract The New Partnership for Africa's Development (NEPAD) contends that increased levels of foreign direct investment (FDI) inflows are crucial if Africa is to achieve sustainable development and poverty reduction. Consistent with this view, NEPAL) calls African countries to create and adopt enabling environments within which FDI can flourish. Although reliance on FDI as a source of growth may be a pragmatic one, drawing on a review of the theories of FDI, this paper argues that whilst FDI can indeed be a source of good, it can equally be a source of economic harm. Consequently, in embracing FDI, NEPAD must have a regulatory mechanism in place to ensure that only FDI that meets the developmental objectives of the hosts state is welcomed.