Attracting MNCs and enforcing local content laws: the double breasting dilemma in less developed countries in sub-Sahara Africa

Multinational Companies (MNCs) has become important players in international trade and development over the past three decades (UNCTAD 2012; Aseidu 2006; Meyer 2004).

Africa endowed with numerous natural resources is yet to benefit fully from such naturals resources (Aseidu 2006).

There still remain many structural and macroeconomic challenges that limit the capacity of the continent to achieve sustainable improvements in the standards of living of its people (IMF, WB, OECD).

(a) The continent low application of science, technology and innovation in the production and distribution value-chain

(b) The over-reliance on rain-fed agriculture

(c) The over-reliance on primary production without linkages to other sectors

(d) The worsening income inequalities, education and skills formation, health, social protection, poverty and unemployment

(e) Wide-spread corruption, mismanagement and institutional weaknesses.

It has become imperative for Africa to adopt strategies to attract MNCs into their economies as one of the surest way of promoting economic growth and development with a resulting benefit of spillovers.

In order to benefit fully from the activities of MNCs in these economies, they must ensure the strict enforcement of local content laws.