Free Impact of Foreign Influence/Investment in Africa Essay Sample
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Foreign entities are corporations that are registered to do businesses or other legal activities in countries or other jurisdiction other than where they are originally incorporated. Foreign entities establish themselves in many forms depending on the country or environment in which they are incorporated. These forms may either be mergers or acquisition, establishment of a wholly owned subsidiary or company or a joint venture. Foreign incorporations may also take other forms like establishment of non governmental organizations and other non profit making corporations. Foreign entities can also establish themselves in other countries by acquiring shares of enterprises in those countries. Normally foreign entities are long term investments or establishments that have set objectives and goals to be achieved in the regions of their establishment.
For an entity to be recognized as a foreign incorporation, it has to be registered either in its domestic country or in the foreign country that its operations are conducted.
This can be done by either the entities registering as foreign corporations in domestic country or organizing a new corporation in every region where the entities want to carry out their activities. Foreign corporations carry out their activities a single entity irrespective of where they are established with one headquarters and management structure. While carrying out activities in home country these entities are referred to as domestic corporations. Irrespective jurisdiction entities are required to abide by the laws and regulations in the regions where they are organized. These may include filing a compliance report periodically, tax requirements and so forth.
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In Africa many foreign entities are established with various aims. These aims may range from conserving the environment, contributing to development projects, providing relief services, fighting for human rights issues and advocating for good governance and leadership. In many decades Africa has been faced by challenges of poverty, poor leadership and governance and lack adequate education and skills. Due to these challenges, various humanitarian organizations mostly NGOs and PAC have moved into Africa to contribute in seeking solutions in alleviating the challenges. The numbers of Non Governmental Organizations establishing themselves in Africa countries has been continually on the rise. This is mostly attributed to the global awareness of human needs and right that every being should enjoy irrespective of the country they leave. Many charitable organizations have therefore have been identifying African countries with humanitarian crisis like war and drought and establishing themselves there to help in improving the lives of the residents in the region. Through foreign entities funding and other support many African economies have grown to notable levels and this therefore necessitate the need for such entities in those countries.
Due to the importance of these entities in Africa, many governments have welcomed their activities and considered their support as a pillar in their economic progress. Other governments have been rejecting foreign entities and considering them as nuisance or threats to their interests. NGOs have consistently stepped up to the plate to expose injustices in African countries and therefore they have been viewed to some extent as source of livelihood for millions of poor Africans. Such organizations are described as saviors since their activities have saved thousands of lives that had no hope of a better tomorrow. Though the foreign entities have been always linked with generous help to Africa, a number of these entities have turned into suckers of Africa resources by using the suffering of hopeless and helpless of Africans to achieve other objectives. A number of these entities are money minting firms by their proprietors; others serve the interests of their sponsors abroad. Ideally, NGOs and PACs are expected to help Africans overcome many challenges in the continent. Unfortunately in this poverty-stricken continent, where accountability counts less, large percentages of these entities in Africa are corrupt business outfits. They deceive their Western donors and contribute nothing to the society. It is hard to generalize about the performance and integrity of the numerous foreign entities operating in Africa. What may be true of one entity may not necessarily be true of another. African countries have therefore to been keen in monitoring the activities of these entities in ensuring they add value to Africans.
Many Africa countries have are beneficiaries of foreign funding through grants and other NGOs activities. Such grant is African Development Foundation which provides funding to organizations based in African countries where it works and has offices. The foundation provides unsolicited grant support for projects aimed on the development of micro- and small enterprises, export trade and investment activities of small and medium-scale enterprises, and participatory community development projects.
This grant aims at enabling grassroots groups in Africa to generate increased income through productive enterprises that boast economic production capacity and increase economic security of various families and communities in Africa. This grant provides grants to private and other NGOs in Africa to finance sustainable poverty alleviating initiatives that are conceived, designed, and implemented by Africans and aimed at enlarging opportunities for community development. The grant also stimulates and expands participation of African countries in the development of their countries. In addition the grant also builds sustainable African institutions that foster grassroots development. Currently ADF has branch networks in Cape Verde, Ghana, Guinea, Mali, Namibia, Benin, Botswana, Niger, Nigeria, Swaziland, Senegal, Tanzania, Uganda, Zimbabwe and Zambia.
Africa foundation is another non - profit organization in Africa that has a positive contribution in the continent. The organization is registered in South Africa and is recognized as a public benefit Organization. It currently manages developments projects in many African countries like Kenya, Zimbabwe, Tanzania, Botswana, Namibia and Tanzania. This foundation mainly focus on education programmes which include establishing bursary funds, developing preschools and classrooms, teaching environmental awareness, carrying out vocational training, capacity building in African communities and promoting adult education programmes. The foundation also promotes health care issues in the countries where it operates. Activities in health sector include building and equipping clinics, conducting HIV/AIDS awareness campaigns, and assisting in clean water provision. Africa foundation also is involved in income generating activities in African countries. The foundation identifies opportunities for entrepreneurship by stimulating potential income generation projects through skilled training programmes. The training also enables access to technology that is vital in entrepreneurship. Through the foundation various projects are funded based on their needs within the communities. In addition the foundation also assist in protecting Africa natural resources and environment such as National parks by promoting a socio-economic development of rural populations living in or close to these conservation areas.
The foundation identifies projects to be implemented through need analysis and community proposals and suggestions. In general Africa foundation provides project management, donor relations, administration, monitoring and evaluation of projects.
African Women Development Fund (AWDF) is another development fund in Africa. It is an institutional capacity-building and programme, which aims in developing a culture of learning and partnerships within the Africa women's movement. Through the funds, national, local, sub-regional and regional organizations in Africa working towards women empowerment are funded. In addition to awarding grants, the AWDF attempts to strengthen the organizational capacities. The fund is mainly concentrated on six main areas which include economic empowerment, HIV/AIDS, health and other reproductive rights, peace building, political participation, and human rights. This fund can be applied by various organizations local, national or sub-regional from any part of Africa.
Foreign entities have many benefits in Africa. These benefits range from economic, political, moral and other essential assistance. Many African countries have economically benefited through improved investment climate, development of human capital, entrepreneurship and support in promoting trade. Through foreign aids African economies are able to supplement their inadequate domestic resources and improve their infrastructure. In other cases foreign entities funding is seen as important support in maintaining good governance. Foreign funding has helped Africa economies in a number of ways. One reason why these countries seek and accept foreign funding is for the purpose of economic development. The funding improves the investment climate and promotes entrepreneurship, as well as provides direct support in trade. Occasionally, advanced countries' organizations have excellent program that teach entrepreneurship and investment. Funding from foreign aid also helps in supplying the lacking resources such as foreign exchange. In addition these funding has tremendously contributed in development of administration systems and infrastructure. Many NGOs in Africa have been funding government leadership programs. Occasionally the funding has been extended in education systems. Funding of education has contributed development of Africa economies since skilled human resource is tapped and used accordingly. In countries like Kenya foreign aid has enabled provision of cost free education for up to tertiary levels. Moseley (2006 para 13) states that education aid can make our world better place to live by building civil society. Education aid in Africa is also a future investments that as long term benefits
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Foreign funding has also supported medical services in African countries through various means like providing vaccine and building the hospitals. This funding and countries own efforts have been able to minimize diseases and health related problems. Foreign funding also comes along with technical assistance about new technology. The fight against HIV/AIDS in Africa countries has been purely dependent of foreign funding. Many African governments have relied on foreign aid in staging campaigns to fight the pandemic and supplying the sick with medicines. If such funding is not available these countries can be in a sorry state in terms of health.
Over many decades, Africa as relied on foreign aid to solve food crisis. Unfavorable climate conditions such as drought have always created a need of foreign aid. This aid is therefore vital in sustaining the people of Africa. Many of undeveloped countries cannot solve their food problem so they need help. According to "Commodity Boom Eats into Aid for World's Hungry" the author said "The United States, the largest donor of food aid, spends about $2.4 billion per year on donations to Ethiopia, Sudan, and other vulnerable nations."(para. 3). The U.S. spends a lot of budget to food aid because it is very important fact. Therefore, food aid is useful to poor countries because the food is one of the necessities of life. According to World Health Organization (2004) "Starvation is a significant international problem. Approximately 815 million people are undernourished, and over 16,000 children die per day from hunger-related causes." (para. 4). Therefore, foreign aid can benefit people suffering from a shortage of food. It can be used to improve peoples' lives in the short term, so that a society can increase its standard of living to the point that food aid is no longer required.
Critics of foreign funding argue that the aid has at times been disastrous for countries in Africa and elsewhere. According to Dilorenzo (2005 p18), "food aid depresses agricultural prices in the recipient countries, driving many of their farmers into bankruptcy, and creating even more dependence on foreign aid." The farmers then migrate to the cities to find work, driving up food prices there, which is often met with price controls on food, which creates even more food shortages and appeals for even more foreign food aid.
Apart from the benefits of foreign entities in Africa there have been also negative impacts from these organizations. Less developed African countries have formed a misconception that it is the responsibility of developed countries to provide assistance to them. The misconception therefore as made the countries fail to emphasize hard work and own innovations resulting into financial slavery always waiting for foreign assistance and support.
In conclusion, foreign funding is an essential support to African countries. Through the fund many African economies have been able to rise and living standards of their people improved. Developments in modern Africa has enabled favorable environment for foreign funding unlike during colonial era when colonial masters dictated the support to be given to African countries. African governments have also a role to play if foreign funding has to be a success. African governments have to corporate with foreign entities and monitor their activities.