**2. FDI trends in the selected Sub-Saharan, developing and emerging economies**

**Figure 1** shows the trends of FDI inflows as a percentage of GDP for six countries from 1998 to 2018. The trends give an idea whether these countries are failing to attract FDI or it is merely investors losing interest. In the year 1999, Namibia was experiencing better inflows reaching a peak of roughly 11% than all other countries until it rapidly dropped in the year 2001. In South Africa, FDI inflows increased rapidly from 0.71% in 2000 to 6% and then significantly dropped within a year and this occurrence of foreign direct divestment was highly perceptible.

Botswana's vulnerability to external economic shocks was experienced during the global financial crisis of 2008. FDI inflows declined as signposted by [5] due

*Foreign Direct Divestment Phenomenon in Selected Sub-Saharan African Countries DOI: http://dx.doi.org/10.5772/intechopen.100304*

#### **Figure 1.**

*FDI inflows as a percentage of GDP for the 1998 to 2018 period [4].*

to the low global demand for minerals, which led to a sharp decline in commodity prices and volumes traded and this translated into provisional closures of diamond mines, and possible job losses. The country's dependence on minerals which are finite left it more susceptible to external economic shocks and this further entails that the country is nothing without its diamond mining. Also, evidence pointed out that Botswana has gone from being low-income nation to an upper-middle income country after the discovery of the diamond mine, with an increased real GDP averaged at 4.6% between 1994 and 2011 [5].

All countries experienced a foreign direct divestment after the world financial crisis in 2008 of which Namibia and Egypt mostly recovered in 2010 and 2011 respectively. This was the most severe financial crisis the world economy has ever faced since the Great Depression. These countries need to find ways that attract foreign investment to earn foreign currency and bring employment opportunities to their respective economies. In addition, Namibia's inflows seem to be upward trending over the years moving away from the mean average, say 1.5%. However, FDI inflows to developing countries remained quite stable since 2004 with an increase of roughly two percent relative to a decrease of 27 percent for developed economies [6].

The world recession owing to the global financial crisis was highly perceptible in 2008 as shown in **Figure 2**. This occurrence of foreign direct divestment was not

**Figure 2.**

*World FDI inflows (US\$ trillion) for the 1998 to 2018 period [4].*

only experienced by developing and emerging economies as discussed earlier in **Figure 1** but the world economy as well. The world economy experienced another fall in FDI inflows from 2016 and this decline seem to be noticeable again in 2018 onward. In addition, world FDI flows continuously declined by 13 percent in 2018. This decline was due to United States (US) intercontinental enterprises through returns at US of tax reforms and foreign earnings [7].

The occurrence of foreign direct divestment in 2018 could also have been induced by the spillover effects of the US-China trade wars which could have affected the world economy through trade openness (measured by the sum of imports and exports) and made it difficult for some countries (particularly developing countries) to be accessible in the world market. US has since imposed tariffs of around \$436 billion on Chinese goods since July 2008 until July 2019 and this trade war was significant and most likely to effect in some economic displacements [8]. The spillover effect of the US-China trade war is that both these countries affect any significant trade, economic and investment links and any direct foreign investment links with their respective trading partners [8].
