The true motivation behind FDI?

The issue I want to address comes in the recommendations made in the State of the Union address delivered by President of the European Commission Jean Claude Juncker addressing the need for an increase in FDI into Africa. The reason for this analysis is to understand the motivations behind EU sudden interest in providing more FDI leading to viewing Africa as a mutual business partner in light of the signing of a new deal between the two unions of the EU and AU. (Stopford, 1998).

Juncker calls Africa, Europe’s twin continent and discusses the need to invest in a mutual partnership (Juncker, 2018). He states that Africa is no longer a continent just meant to be looked at through the prism of development aid but now as a mutual business partner. It is worth noting that during the early twentieth century most of Africa had been colonized by Europe draining it of its resources and primary raw materials and was effectively used as a pawn by the European Nations in their quest for dominance. A century later, Africa once again seems to be used as a pawn to satisfy the European agenda to act as a “global player” under the disguise of mutual economic growth (Juncker, 2018). The timing also seems very suspicious that Europe has decided on “more private investment and trade with the African Union” (Juncker, 2018) as between 2000 and 2017 China has been loaning Africa nearly $143 billion dollars in loans to various governments which many scholars speculate as debt traps used by China to exert dominance over a region (CARI, 2018).

The pros to such a suggestion would be creating jobs within the African Union leading to less migration to Europe in the hope for employment. The standard of living in Africa could improve based of the increase in investment in development projects.  There would also be an increase in GDP per capita and the spending power of African nations. Europe could also challenge China by making Africa self-sustainable and providing them with the wherewithal to pay off the outstanding and ever increased loans, freeing them from the immediate threat of external influence.

The cons to such a mutual partnership is the lack of mutual respect between the nations. It is plausible that Europe could be using this deal to get a foothold into Africa and control over its decisions regarding Foreign Direct Investment as well as a governing authority on “sovereign decisions” (Juncker, 2018). The statements used by Juncker do not specify who would be receiving this funding and how it would be distributed within the African Nations. Who would benefit more and who would get less? There is also the possibility for repercussions to nations who do not sign on as seen in the previous AU-EU deal where Kenya refused to sign and was subject to heavy import tariffs.

In conclusion, is the purpose of this FDI meant to purely altruistic or is the true purpose supposed to be vested in self-interest? Am I being too skeptical in not buying into Junker’s “brother country” mentality when it comes to EU- AU relations?



  • Cini, M. (2016). European union politics. Oxford University Press.
  • Jean Claude Junker (2018). State of the Union 2018: The hour of European sovereignty.
  • John Stopford (1999) “Multinational Corporations,” Foreign Policy, 113

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