Administrative Barriers to Foreign Investment: Reducing Red Tape in Africa (Occasional Paper (Foreign Investment Advisory Service))

When at every turn, they find a new twist, or a new requirement, foreign investors in Africa can be easily discouraged from setting up businesses. Although many African governments have liberalized and reformed investment policies and promote themselves as investment sites, the reality facing investors differs greatly. To help change the 'lack of investor response' to Africa's enticements, this book examines the administrative constraints to investment in several African countries. It presents the experience that confronts investors when they set up a company. The case histories demonstrate how the morass of licenses, approvals, permits, and other requirements that result in undue delays and unforeseen costs encourage bribery and corruption and foster an environment of pervasive uncertainty for all investors. The chapters are divided into four areas, which correspond roughly to the chronological process of investment. They are: 1) general approvals, licenses, and registrations; 2) specialized approvals; 3) requirements to gain access to land, site development, and utility connections; and 4) operational requirements. This publication will be of interest to government officials, academics, and investment firms. The book consists of two papers which provide an overview of administrative barriers in Africa, and a very in-depth look at how one country, Mozambique, used a very large foreign investment as a mechanism to begin to tear them down. The first paper is based on a series of country-specific studies on administrative barriers done by Foreign Investment Advisory Service (FIAS) and the United States Agency for International Development. These studies covered Ghana, Mozambique, Namibia, Tanzania, and Uganda. Each country study relied on review of primary materials, laws, and regulations. The second paper is a detailed look at how the administrative barriers that existed in Mozambique threatened to derail the huge Mozal aluminum smelter that was proposed by South African investors. Not only were the barriers overcome for this special project but also the Government used the knowledge gained in the process to reduce barriers for all investors and establish institutions that could facilitate other investments. The message in both papers is that administrative barriers constitute a significant impediment to foreign direct investment in Africa. Many of the administrative procedures required of investors have no real justification. Removal of unnecessary barriers and streamlining other administrative procedures require detailed efforts by governments involving the exercise of significant political leadership In the post-Cold War world, trade is the new arena for competition -- between nations, between groups, between ethical and theoretical ideas. In this revised and updated second edition of Dilemmas of International Trade, political economist Bruce E. Moon puts contemporary trade events -- NAFTA, United States-Japan controversies, the Uruguay Round of GATT, China's Most Favored Nation status, the founding of the World Trade Organization -- into historical and theoretical perspective as he clearly explains economic theory, terms, and concepts in the context of international relations.