Foreign Direct Investment in Burkina Faso Essay

Foreign Direct Investment in Burkina Faso - Essay Example From this paper it is clear that  the host country for FDI stands to benefit in a number of ways in terms of capital formation, export diversification, technology import, management system improvement, and enhanced market competition, infrastructure development to support economic activity, financial sector growth, and markets development.According to the report  FDI is a powerful engine in helping to achieve country objectives such as those about poverty reduction, development, and international integration and it is perceived to be an international investment route that most developed economies have embraced. Low income countries in Africa, for example, have not taken this advantage and are thus being excluded from the globalization benefits of FDI.  Burkina Faso is a landlocked sub-Saharan country located in West Africa. Its population is estimated at more than sixteen million people. Burkina Faso experiences limited rainfall and their natural resources are minimal and there fore it is referred to as one of the poorest countries in Africa. Poor farming activities and the existing drought have ruined the environment resulting in decrease of food stuff. The main export product for Burkina Faso is cotton accounting for about 60% of the country’s total exports, or 5% of GDP.  The country has limited resources and is highly prone to external vulnerabilities because its economy is heavily reliant on imports rather than exports, despite the country entering into intraregional trade liberalization agreements.