The recent African Continental Free Trade Agreement (AfCFTA) and its related Protocols will offer greater investment opportunities for SADC Members within an integrated continental market as well as increased competition for footloose investment. This implies an even greater need to focus on raising the competitiveness of the region for sustainable investment.
The Investment Division of the OECD Secretariat has been working closely with the SADC Investment Sub-Committee for over a decade to improve the investment climate across the region and within individual countries through OECD Investment Policy Reviews. Most recently, the OECD has collaborated with the World Bank to develop a SADC Investment Climate Scorecard. The first phase of this project involved the addition of SADC Member States to the OECD FDI Regulatory Restrictiveness Index, a key measure of the extent of discrimination covering over 100 countries worldwide.
This report introduces newly developed OECD tools and analysis to the SADC region, including both FDI Qualities and a database on investment incentives. It is designed as a baseline diagnostic to explore ways to reinvigorate the reform of the SADC investment climate in order to prepare the region for the AfCFTA, while also providing a greater focus on how to improve sustainable outcomes from investment.
The policy areas covered in this study include the national regulatory framework encapsulated in national investment laws and how this compares with initiatives at a regional level, investment promotion and facilitation in SADC, investment incentives, investment for green growth and, lastly, responsible business conduct. The selection of areas builds on OECD work in these areas to highlight essential elements of a conducive investment climate which promotes not only FDI but also sustainable development. The aim is not to provide a ready-made reform agenda for countries in the region but rather to explore policy areas which influence investment and its impact.
A companion report was also prepared for Economic Community of West African States (ECOWAS), another important regional economic community in Africa. Given that the two regions are confronted with similar challenges in mobilising investment for sustainable development, as well as in fostering greater regional and continental integration, the two reports share a similar structure and analysis. Many of the recommendations are also common, given the parallel challenges and the high level of generality of this preliminary scoping report. These reports provide a solid basis for developing a long-term programme of collaboration with each region, using more tailor-made approaches based on the specificities of each region.
This report was presented at the SADC Investment Sub-Committee meeting on 29-31 May 2023 in Victoria Falls, Zimbabwe.