Inclusive Industrialization: The Interplay Between Investment Incentives and SME Promotion Policies in Sub-Saharan Africa
Law and Development Review, Volume 11, Issue 2, pp. 557–587
22 Pages Posted: 9 Sep 2018
Date Written: July 28, 2018
Most Sub-Saharan African countries have adopted policies to attract foreign direct investment (FDI) and policies to stimulate the growth of small and medium enterprises (SMEs). While a significant body of literature exists analyzing how these objectives can be mutually reinforcing, the negative interplay between these policies remains relatively unexplored. This paper examines whether, and in what circumstances, investment incentives could undermine SME competitiveness and, conversely, whether policies aiming to promote SMEs through encouraging FDI-SME linkages could impede FDI. This paper demonstrates that, absent a comprehensive approach to policy making, tensions invariably arise between investment incentives and SME promotion policies.
Keywords: Sustainable Development Goals, Small and Medium Enterprises, Investment Incentives
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