Increasing Agricultural Productivity:
Encouraging Foreign Direct Investments in the COMCEC Region
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 Unfortunately undernourishment is still a phenomenon in many parts of the COMCEC
Regions, and 35 COMCEC Member Countries are classified as Low-Income Food Deficit
Countries of which 21 countries are classified as “Countries in Crisis Requiring External
Assistance”,
 Positively, many COMCEC Member Countries have successfully achieved a leading or
dominant position on the world commodities trading market. Examples are Cote
d’Ivoire in cocoa and Indonesia in palm oil and natural rubber,
 On an aggregated level, the COMCEC Region is still a net importer with a negative trade
balance of 48 percent,
 FDI can help boost productivity levels and improve the negative balance of payment, but
this is more nuanced and should be customized towards the economic development of
individual COMCEC Member Countries,
 Investment incentives play a role in the final stages of a location selection decisions,
once an investor evaluated all countries and created a shortlist of feasible countries.
Appealing incentives in one country can result in a competitive edge over the others,
 In terms of actual FDI trends, the share of Agricultural FDI to Global FDI is negligible,
and represents only 0.3 percent of worldwide FDI projects,
 In total, 371 agricultural FDI projects were recorded, creating more than 115,000 jobs
and raising 45.2 billion in investment in the COMCEC Region,
 FDI projects peaked in 2011, and economic and financial crisis showed limited impact
on the level of agricultural FDI projects in the COMCEC Region,
 Domestic Market Growth Potential key motive for investors and mainly large companies
invest more in agricultural FDI, and food & tobacco is the top sector with the majority of
projects,
 Largest agricultural FDI projects in terms of capital and labour originate in India and
geographical pattern of FDI in the COMCEC Member Countries is skewed towards the
large production countries such as Indonesia, Malaysia, Turkey and Nigeria,
 Besides the direct benefits (jobs and capex)of FDI, the multiplier effects (or indirect
benefits) such as skill and knowledge transfer and investment in transportation and
logistics add to the economic development goals of the COMCEC Member Countries,