The remarkable transformation in information technology, though comparatively primitive to the communications infrastructure of countries like the United States and Great Britain,   has progressed in Africa.[1]   In an age of globalization, there   has been an increase in capital flows into Africa that has been accentuated by political stability as well as economic liberalization. However, of particular interest as well as voluminous scholastic study is economic development, which is almost always based on the study of how countries in the developing world such as Zambia, South Africa, Mozambique, are developing and the various ways to accentuate their development (normative economics) .

The role of foreign investments in the host country, usually a third world country (underdeveloped) has been studied extensively by many scholars (Moral, Graham, Blomstrom 2005) (Hou 1965) (0L’ 1922) and a general trend is that foreign investments have correlated with economic growth; in fact other scholars go further to study how foreign investments should be used for economic development (Hee Kim, 1970). Many investors in the countries that receive foreign investments have taken advantage of what modern economists   call globalization which has made the world “flat” and as a result has structurally made it possible for cash to be disseminated at a relatively faster rate (Friedman, 2005).[2] The view of the underdeveloped world as “emerging markets” has also exponentially fueled capital flows where private actors and governments have been slavishly investing in the various countries (Beckett, Sudarkasa 2000).      

  I. Africa in the Global Economy  

 Africa has always been a tremendous force in the global economy.  Its presence in the global economy has been accentuated by technological advancement    starting from external developments such as ships that were built to travel to the continent to internal developments that made economic activities such agriculture more productive. Global trade during the 15th  and 16th century was growing and with each preceding year its growth was exponential which continued with the Industrial Revolution (17th and 18th century) providing an unprecedented impetuous.[3] At this point Africa structurally started turning into an area where raw materials could be extracted and then taken to the west where they were processed into finished products (Adam, 1999). The projection of Africa into the global economy led European powers to “Scramble” for the continent eventually leading to the division of Africa into regions owned by the major world powers of the late 19th century (Pakenham 1992). 

As a result of the scramble, the continent’s participation in the global economy was conducted through the colonizers and the region was mainly used for raw materials.  However, the role the region played in the global economy and international politics drastically changed with Ghana’s independence and the preceding movements for independence that came after 1957; the continent then  not only attempted to play  a more authoritative economic role but also a political one (Meredith, 2006).                 Most countries in Africa, however, maintained and still maintain economic ties with the mother countries through organizations such as the Commonwealth for those mainly colonized by the British or Organization Internationale de la Francophonie for those colonized by the French.  This is a result of the inherent economic dependence with which the countries experienced when they were colonized (Fieldhouse, 1999).  The implications of the colonialization of African countries has a lot of influence on the assessment of the degree of economic independence that most of the countries have; but since the 1990s most  African countries have  more economic  freedom and the  prevailing economic theory of the time,  allowed some countries to take on a  more liberal approach to economics. Such structural transformations forced some of the countries to gain some degree of economic autonomy because of what was considered the changing world (Fukuyama 1993; Friedman 2005). Moreover, in addition to structural changes that seemed to favor open economies, some of these economies eventually become “emerging markets,” as countries spearheaded economic development and made efforts to attract investors (Beckett, Sudarkasa 2000).  

[1] Gumusai Mutume, a writer, has followed technological innovations quite extensively in the United Nations Publications African Renewal. His most recent piece was entitled “ Africa seeks to boost  home grown high tech” which  is available at the UN website   “Africa seeks to boost home grown high tech,” http://www.un.org/ecosocdev/geninfo/afrec/newrels/africas-science-revolution.html.

[2] Mangal  Goawani and Jack Ree of the International Monetary Fund and Capital Markets Department and Ina Kota of the International Monetary External Relations Department wrote an article entitled “ Global Capital Flows: Defying Gravity” which provides a time series showing  the extent to which  global capital flows have increased. It is available at the International Monetary Fund Website http://www.imf.org/external/pubs/ft/fandd/2007/03/picture.htm

[3]   Many scholars have seen the integration of   countries into the global market as an inevitability. Michael Mussa, Counselor and Director of Research at the International Monetary Fund, writes and extensive report entitled “Factors Driving Global Economic Integration.” The article is available a http://www.imf.org/external/np/speeches/2000/082500.htm