The role of economic diplomacy in promoting foreign direct investment in Africa: case study of Kenya.

Abstract

This study focused on the role of economic diplomacy in promoting foreign direct investment using Kenya as the case study. It examines the relationship between economic diplomacy and foreign direct investment, Kenya’s economic diplomatic strategies for promoting FDI as well as prospects for promoting FDI as a key component of economic development. The study employed both qualitative and quantitative research design in data collection and this helped in getting relevant information for the study. The study observed that economic diplomacy is an essential mechanism that should be promoted to attract investors in the economy. Economic diplomacy ensures that nation states cooperate with one another thereby creating room for investment flow from one region to the other. The study also observed that economic diplomacy also experiences challenges that affects its effectiveness like conflicting interest among the actors. Foreign direct investments were also observed to experience challenges that are linked to unfavorable political environment, heavy conditions and licensing costs that makes investors to shy away. This study demonstrates that Kenya is involved in numerous bilateral and multilateral negotiations in the international system to attract foreign investors as this promotes its economic growth and development.