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Inclusive Industrialization: The Interplay Between Investment Incentives and SME Promotion Policies in Sub-Saharan Africa

Colette M.A. van der Ven EMAIL logo


Most Sub-Saharan African countries have adopted policies to attract foreign direct investment (FDI) and policies to stimulate the growth of small and medium enterprises (SMEs). While a significant body of literature exists analyzing how these objectives can be mutually reinforcing, the negative interplay between these policies remains relatively unexplored. This paper examines whether, and in what circumstances, investment incentives could undermine SME competitiveness and, conversely, whether policies aiming to promote SMEs through encouraging FDI-SME linkages could impede FDI. This paper demonstrates that, absent a comprehensive approach to policy making, tensions invariably arise between investment incentives and SME promotion policies.


The author expresses thanks to Nicholas Jordan for helpful research assistance. The author also thanks the participants of the 2017 Law and Development Conference for helpful feedback on an earlier draft of this paper. Disclaimer: The views expressed in this paper represent the personal views of the author, and do not represent the views of Sidley Austin LLP or its clients. This article has been prepared for informational purposes only and does not constitute legal advice. Readers should not act upon this without seeking professional advice.


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Published Online: 2018-04-28
Published in Print: 2018-06-26

© 2018 Law and Development Review

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