In every country of the world, leaders are implementing actions to achieve a good level of development and improve the standard of living of their citizens. To function, the economy therefore needs liquidity or financing, which takes several forms.
In a country like Benin, one can mention the use of several modes of financing including foreign direct investment (FDI).
These are direct investments made by foreign companies in another country. FDI is also seen as a means of internationalization (Boursorama, 2020). The principle is rather simple. When a company, French for example, invests in a company in Benin: it is a foreign direct investment. It may be to create or develop a subsidiary in Benin; or it may be mergers and acquisitions, i.e. business combinations.
Source: Produced by AJEB based on World Bank data, 2020.
The objectives with FDI are to reduce production costs thanks to the availability of attractive raw materials and to benefit from more advantageous taxation. FDIs also enable the establishment of new markets and job creation. They send a positive signal of a country's economic attractiveness when they are growing.
CJEA