How to join 'the FDI Club': The role of Investment Promotion

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For the very first time, developing economies in 2013 attracted more Foreign Direct Investment (FDI) than developed countries: fully 52 percent of global FDI flows, according to the United Nations Conference on Trade and Development (UNCTAD). Every government of a developing country aspires to have an economy that’s able to provide a better quality of life for its citizens.

In highly competitive market environments, developing countries turn to private investment as a key driver of growth. Private investment can increase government revenue streams, create jobs, improve labor skills and help link domestic firms to global value chains by creating supply-chain opportunities. Encouraging and attracting private investors is thus one of the core priorities for any government that understands how the private sector can play a key role in fueling the country’s economy, reducing unemployment rates and improving living standards. Every government of a developing country aspires to have an economy that’s able to provide a better quality of life for its citizens. Yet the 52 percent of FDI is highly concentrated in a relatively few countries. The question for most governments thus remains: How to join “the FDI Club”?
The role of investment attractiveness often falls to national or subnational investment promotion intermediaries (IPIs). The role of these agencies cannot be overstated, even though their effectiveness in many countries is, at best, mixed. To be effective, an IPI must build on investment-friendly policy and regulatory frameworks, aiming to develop a strong capacity to market the country to investors who are willing to consider investing their capital in the economy’s high-priority sectors.  The aim is not about, “If we build it, they will come”: Instead, it’s about, “Let’s invite them to come and see, so they’ll invest.”

The World Bank Group’s (WBG) Trade and Competitiveness Global Practice has an investment promotion team that works closely with colleagues in its Investment Policy and Competitive Sectors teams, advising governments on sector competitiveness for FDI, institutional policy, structures and capacity. The hands-on support it provides – in such key implementation areas as investor facilitation, sector targeting and investor aftercare in manufacturing, services, tourism and agribusiness – have shown that investment-promotion work can attract much-needed investments and can ensure that they are sustainable over the long term. Across a number of sectors, the World Bank Group helped governments attract more than $2 billion of new FDI from 2012 - 2014.

Africa is a particularly good example of how investment-promotion initiatives can help attract transformative investments in the agribusiness sector. In Rwanda, for instance, an important challenge has been to remove critical constraints to investment and exports in the agribusiness sector, especially in the horticulture and tea sub-sectors. As part of a larger WBG project, an investor-targeting initiative helped to change the landscape of the country’s horticultural sector, which had previously included only scattered domestic production for the small national market: The initiative catalyzed new investment and linked the subsectors to international markets. Today, two foreign companies have started operations and another six are near start-up. The investor-targeting effort is expected to result, over time, in $20 million in foreign investment and the creation of 2,000 new jobs, improved livelihoods for thousands of contract farmers, and better access for Rwandan products to international markets.

The WBG’s investment promotion and agribusiness teams have condensed the lessons and tools from these and other projects around the world into a single, easy-to-follow guide to Investor Targeting in Agribusiness. The guide, coupled with more than 30 implementation tools, leads development practitioners through the four key steps to attracting agribusiness investment. The tools include well-defined Terms of Reference, guides on environmental and social issues, research resources, competitiveness assessment tools, communication templates, model materials for investors, and more.

Investor Targeting in Agribusiness provides users with tools they need to approach investors with confidence, increasing their chances of success in winning their investment.  

For online access to the guide and related tools, go to:

For hard copies, or for additional information and assistance, please contact:

For online access to more information about the work of the Trade and Competitiveness Global Practice in investment promotion go to:
For more information about the case of attracting investment to Rwanda, go to:



Selma Rasavac-Avdagic

Senior Operations Officer, Trade and Competitiveness Global Practice

Sara Rebollo Ramirez

Investment Promotion Officer, Trade and Competitiveness Global Practice

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