Africa Keywords:, TNK. FDI, ways of organizing production, modernization, global economy, financial and economic crisis

Attracting foreign capital is one of the main priorities of the investment policy of most African countries. Foreign direct investment (FDI) is seen here, as elsewhere in the world, as an important channel of access to the resources of multinational corporations (TNCs) that these States need to develop and modernize their economies.

According to UNCTAD estimates, total FDI inflows to African countries were $52.6 billion in 2009 and $43.1 billion in 2010. and in 2011 - ^$42.7 bn1. Its decline was primarily caused by the social upheavals taking place in the Arab north of Africa. Unrest and lack of stability in Egypt and Libya have led many potential investors to refrain from sending capital to these countries for the time being. As a result, Africa's share in the global investment flow has declined slightly: if in 2010, Africa's share in the global investment flow declined slightly. it was 3.3%, but in 2011 it decreased to 2.8%².

Meanwhile, in the sub-Saharan Africa (SSA) sub-region, FDI inflows increased by almost a quarter in 2011, compared to the previous year, to $34.9 billion. This exceeded the highest figure in the last few years, reached in 2008 - $34.7 billion.³

The leaders in receiving these investments are the oil-producing countries of the SSA region and South Africa. Foreign investors considered Nigeria to be the most profitable investment destination in 2011. This country managed to attract $8.9 billion, or one in five dollars that came to Africa in the form of FDI. Nigeria is followed by South Africa ( $5.8 billion), Ghana ($3.2 billion), Mozambique ($2.1 billion), Zambia ($2 billion), Chad ( $1.9 billion), and DRC ($1.7 billion) ^.4 Uganda, Tanzania, Lesotho, Senegal, Botswana, and Namibia were also successful in attracting FDI. These countries are characterized by stable political and economic policies, a noticeable increase in annual GDP growth, active implementation of privatization programs, and successful implementation of measures to stimulate FDI inflows.

WHAT DOES THE INVESTMENT AMOUNT DEPEND ON?

When assessing the near-term prospects for the development of the African economy, UNCTAD experts pay special attention to changes in world commodity prices. The scenario outlined in the latest UNCTAD World Investment Report calls for an increase in FDI inflows to Africa to $70-85 billion in 2013 and $75 - 100 billion in 2014. This forecast is likely to be supported by high commodity prices and economic growth. ⁵ Naturally, if these indicators fall, we should expect a reduction in the income of a number of African countries and an influx of investment in their raw materials sector. The slowdown in export revenue growth will be most pronounced in countries with less diversified economies, especially in those where oil, as well as other minerals and metals, dominate exports.

The UN report "World Economic Situation and Prospects 2013" forecasts economic growth in Africa at 4.8%. This rather high indicator will be supported by the introduction of new facilities in the oil and mining sector in a number of countries (Guinea, Ghana, DRC, Lesotho, Liberia, Madagascar, Mauritania, Mozambique, Niger, Sierra Leone), growing investment in infrastructure projects and expanding cooperation with Asian States. At the same time, the continent's largest economy, South Africa, will grow almost twice as slowly as in 2012, due to a wave of strikes in the mining industry and the negative impact of the crisis in the economies of the Eurozone countries, which have become one of the main markets for South African products with a high share of added value.⁶

Today, Africa contributes 2.5% to global GDP, compared to 1.3% without the major economies of South Africa and Nigeria.⁷

High rates of GDP growth in Africa can also be a source of stress.-

to facilitate the flow of foreign direct investment to these countries. At the same time, there is a risk that FDI inflows from developed countries will be less than expected. The reason is structural problems in the economies of these countries and in the global financial system.

The post-crisis development of the global business environment, including the situation in countries with highly developed economies, is generally fraught with many uncertainties. These include risk factors such as the unpredictability of the global economic governance system and imbalances in budgets and financial sectors. The economies of the Euro area countries are still in a state of recession, which has worsened due to tightening monetary and fiscal policies and the instability of the financial sector. According to the UN forecasts, it will grow by only 0.3% in 2013 and 1.4% in 2014. Unemployment in the euro area has reached a record level of 12% of the economically active population. The US economy's growth rate remains low in 2013 , at ^{1.7%, which is much lower than in 2012.8}

The continuation of the crisis in the Euro area and difficulties in its banking sector may pose additional challenges for multinational corporations, which will find it more difficult to raise capital for cross-border projects, including in African countries. The ongoing restructuring of TNCs, especially in the financial sector, may be accompanied by the sale, rather than the usual acquisition of foreign assets. Factors that increase policy uncertainty in the fiscal sphere and in the field of investment regulation may be affected. If such risks become dominant, it will be premature to expect an improvement in the situation with FDI on a global scale.

However, it should be borne in mind that although the main inflows of FDI to Africa come from the United States and European countries, for a number of countries on the African continent, investments from other developing countries are increasingly playing a significant role, where the forecasts in this sector of the economy are more optimistic.

At one time, the Chinese were actively involved in the construction of large facilities in Africa, in particular in the construction of the important Tanzam railway connecting Tanzania and Zambia. Now the main thing for them is oil. Significant oil deposits discovered in Uganda and Kenya are of great interest to China. Nearby, in South Sudan, rich oil fields have also been discovered. However, due to the conflict between the two Sudans - North and South - the development of these hydrocarbon resources is problematic for China. The PRC intends to build and further develop an oil pipeline system to the Kenyan seaport of Mombasa, which will open the shortest and most reliable route to China for tankers carrying Kenyan and South Sudanese oil.⁹

Chinese companies are implementing numerous projects across Africa, including ¹⁰ ports, railways and stadiums. Particularly impressive is the construction of the university's Nairobi campus, which is being carried out by the Chinese company Wu Yi. The project provides not only for the construction of a 21-storey building of original architecture, but also a helipad. Recently completed construction of a 50-kilometer section of the eight-lane highway Thika Superhighway (Thika Superhighway), rightly considered the pride of Kenya. Wu Yi is preparing to implement ¹⁸ more projects in this country11.

India is somewhat inferior to China in terms of cooperation with Africa: the country's revenues from trade with African countries amounted to $65 billion in 2012, compared to China's $200 billion. Indian companies, mostly small private firms, cooperate with African companies mainly in such areas as IT technology, automotive and car maintenance, agriculture and education.¹² Recently, the Indians (as well as the Chinese) have been "eyeing" African natural gas13. According to some experts, Indian business is inferior to Chinese in the dynamism and speed of project implementation; in addition, the Chinese are bolder to take risks in entrepreneurship.

The "African piece of cake" has recently been increasingly attracting the attention of entrepreneurs from other countries, in particular, from Brazil ¹⁴ and the Republic of Korea ¹⁵.

In recent years, the development of the service sector has become an important driver of FDI inflows to SSA countries. In addition to traditional models of investment in capital-intensive extractive industries (development of ore deposits, oil and gas), foreign capital flows to banking, retail and telecommunications are increasing. Information infrastructure (cell phones, pagers, Internet) is becoming one of the most attractive objects for foreign private investors in Africa. For example, MTN (South Africa) and Econet (Kuwait) invested $285 million each ⁱⁿ mobile phone development in Nigeria in 200616. This is facilitated by the rapid pace of urbanization, as well as the formation in African States of their own middle class, which has considerable free funds.

As a rule, middle-income consumers use higher-level services, including financial (in particular, in the field of mortgages), telecommunications (especially in the field of mobile telephone communications), educational and medical services, and purchase relatively expensive consumer durable goods. For example, in 2011, the import of passenger cars of various types to the SSA countries increased significantly-

repeat 17. There is no doubt that the same trend continued in 2013.

CHANGES IN THE FORMS AND METHODS OF ENTREPRENEURSHIP

Multinational corporations interact with developing countries using a wide range of production and investment models that go beyond FDI and traditional trade. Co-owned companies (JVs) have become typical for the foreign network of TNCs. For many TNCs, international cooperation has become one of the leading strategies for entering new promising markets and increasing investment activity.

There are a number of circumstances that make joint ventures attractive to TNCs. In particular, they receive certain guarantees against nationalization, enjoy, like national companies, economic benefits, gain wider access to local raw materials and the market, and establish relations with government and private management apparatuses.

By ceding some control over the mixed enterprise to the host country, multinational corporations compensate for this cession by sharing investment risk associated with fluctuations in world prices, exchange rates, and bank interest rates. Even if most of the shares are held by local businesses, the latter often cannot effectively control the affairs of mixed companies, since the decisive factors here are the monopoly of international concerns on modern technologies, organizational and managerial experience, trademark ownership and marketing skills. All this allows corporations, which are a minority on the boards of directors, to still have a veto on key management issues such as borrowing and spending funds to expand production and management operations, issuing new shares, selling assets, setting prices and organizing product sales, appointing senior managers, etc.

In addition, control over mixed companies is achieved by including them in intra-company systems of specialization and cooperation based on the full technological cycle and in the sales network of corporations. In each such system, individual enterprises, although they remain links in the production pipeline, are not able to pursue independent policies.

The contribution of African countries to the formation and ongoing activities of joint societies in the field of natural resource development can only be made in the beginning as profits are generated. Capital for the development of the joint venture is provided by a foreign company, which receives ownership of a part of the mining enterprise. The government of the" host "country may not invest any funds at all; its share in the capital may consist of infrastructure facilities provided, support services, the so-called "resource access fee" charged to a foreign partner, etc.

One of the most important reasons for entering into partnership relations with a foreign company in developing countries is the opportunity to ensure the interested participation of foreign specialists in the modernization of management methods and organization of production and sales processes. For national cadres of African countries, cooperation with representatives of leading corporations of developed countries is the most important form of acquiring modern managerial and technical experience.

In many cases, the acquired skills allow local specialists to take almost complete control of the JV's production and commercial activities after a certain period of time. Such firms, causing a chain reaction of increasing activity of foreign and local investors, become a tool for strengthening the competitive environment and stimulating the most economically viable national enterprises.

A significant role in the investment policy of TNCs is played by ways of organizing production that are not directly related to capital participation (abbreviated as SNK). They are very diverse and include contracting industrial and agricultural production, outsourcing of services (outsourcing ¹⁸), franchising ¹⁹, licensing, management contracts, lease agreements ²⁰, engineering ²¹, consulting and other types of contractual relationships through which TNCs coordinate activities within their global value chains (GPCs).

By the way, some of these forms of investment cooperation between companies in developed and developing countries have been used for a long time and can only be called new conditionally, given their increasing importance in international economic practice.

According to UNCTAD estimates, sales under the NSA mechanisms in Africa exceeded $2 trillion in 2010. Of this amount, contract industrial production and outsourcing of services accounted for $1.1 - 1.3 trillion, franchising - $330 - 350 billion, licensing - $340 - 360 billion. and on management contracts of about $100 billion ²². These estimates cover only the most important industries that use different types of NPCS, and are therefore incomplete. The overall indicator does not include, for example, data on sales under the M & A mechanisms in contract agricultural production, which are common in most developing countries and countries with economies in transition. In Mozambique, about 400,000 small farmers are employed in such production.²³

In developing countries, NPCs provide a significant number of jobs. In many industries, primarily contract manufacturing and outsourcing of services, these countries account for almost all of their employment and almost all of their exports. The growing financial capacity of the continent's most developed countries allows them to enter into contract agreements with TNCs for exploration and production of minerals, contracts for the construction of industrial facilities, and in some cases for the subsequent management of production and marketing of products, instead of granting concessions. Large African national companies purchase technology and technical services in pure form, i.e. without sellers ' participation in the capital of local enterprises. The import of licenses and know-how provides significant time gains and significant savings in research and development (R & D) costs.

For their part, the managers of many international corporations consider a business based on the sale of technology and know-how and the use of highly qualified employees to be no less profitable and safer (especially in developing countries) than the exploitation of local resources based on property ownership.

SNCs are inextricably linked to international trade and determine its structure in many industries. In the production of toys, footwear, clothing and electronics industries, contract manufacturing accounts for more than 50% of finished product exports.²⁴ Thus, for countries seeking export-led growth, SNCs can be an important "highway to market".

The implementation of SNC projects contributes to the growth of technological potential in the" host " countries. After all, Western entrepreneurs, as well as businessmen from China and India, usually offer their local partners extensive and high-quality professional training of national personnel and support in the dissemination and implementation of new technologies. In South Africa, for example, fast-food restaurants and retailers account for almost half of the entire international franchise sector. The African partners were offered a business model and provided with appropriate assistance in setting up a new franchise and training staff.²⁵

* * *

Foreign direct investment remains a key component of the growth drivers of the global, and therefore African, economy. However, this growth is still subject to numerous risks. The post-crisis recovery of FDI flows is slow and unevenly distributed. Developing investment policies for both States and multinational corporations is becoming increasingly challenging due to the evolution of the international economy and the blurring of the boundaries between FDI and non-equity modes of production and trade.

¹ UNCTAD. World Investment Report 2012. Towards a New Generation of Investment Policies. N.Y., 2012. P. 38.

² Ibidem.

³ Ibid. P. 169.

⁴ Ibid. P. 169 - 170.

⁵ Ibid. Table 2. P. 6.

⁶ BIKI, Moscow, February 19, 2013, pp. 1, 4.

⁷ Africa South of the Sahara 2013. Routledge. London and New York, 2012. P. 3.

⁸ BICS...

^{Drabkin A.} 9 In Africa- "in Chinese" / / Pravda, No. 110, 8-9 October 2013.

¹⁰ For more information, see: Deich T. L., Usacheva V. V. Conference in Mumbai / / Asia and Africa today. 2013, N 4; Boguslavskiy A. R. Sovremennye tendentsii politiki PRC v Afrikii [Current trends in China's policy in Africa]. 2013, N 4; Kovalchuk A. P. How the world helps Africa / / Asia and Africa today. 2013, N 5.

¹¹ www.escortservicemoscow.ru/2013/08 (15.08.2013). China and India: The struggle for business in Africa.

¹² For more information, see: "India strives to keep up" - section in the article: Deich T. L., Usov V. A." Voskhodyashchy " derzhavy na Afrikanskom kontinent ["Rising" Powers on the African Continent]. 2013, N 7.

¹³ www.escortservicemoscow.ru/2013/08 (27.08.2013). The struggle for resources in Africa.

¹⁴ See: Borzova A. Yu. Brazil-Africa: an example of highly efficient and promising cooperation / / Asia and Africa Today.

2013, N 9.

¹⁵ See: Morekhodov M. A. The South African Trillion / / Asia and Africa Today. 2013, No. 3: its own - Republic of Korea - African countries // Asia and Africa today. 2013, N 7.

¹⁶ Ekonomicheskaya infrastruktura stran Afrika [Economic Infrastructure of African countries], Moscow, IAfrRAN, 2012, pp. 225-226; TAD. Investment Policy Review. Nigeria/ New York and Geneva, 2009. P. 18.

¹⁷ UN. Africa Renewal. N.Y., April 2011. Vol. 25. N 1. P. 13-15; BIKI. M., July 17, 2012. p. 4.

¹⁸ Outsourcing (from English outsourcing - outer-source-using) - transfer of certain business processes or production functions by an organization on the basis of a contract to another company specializing in the relevant field. The contract is usually concluded for a relatively long period - not less than a year. Functions such as accounting, office maintenance, translation, transport and advertising services, and security are most often outsourced.

¹⁹ Franchising (franchising) - lease of a trademark or commercial designation. The use of a franchise is regulated by an agreement between the franchisee-the one who provides the franchise and the franchisee-the one who receives it. The main thing in the contract is to regulate the amount of deductions for using the franchise.

²⁰ Lease agreements are regulated by a civil law contract, by virtue of which the lessor undertakes to provide the tenant with a certain property for temporary possession, and the lessee pays rent for this.

²¹ Engineering-from the English engineering (to construct, design, arrange, start, invent, invent) - a type of commercial operations that consist in providing one party to another (the customer) with a complex or separate types of engineering and technical work related to the design, construction and commissioning of an object, with the development of new technological processes on the territory of the Russian Federation. customer's company, etc.

²² UNCTAD. World Investment Report 2011/ Non-equity Modes of International Production and Development. N. Y., 2011. P. 123.

²³ Ibid. P. 140.

²⁴ Ibid. P. 155.

²⁵ Ibid. P. 138.

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