What is the primary reason Africa has attracted foreign direct investment (FDI) in recent years?

• A. Abundant natural resources and growing consumer markets
• B. Limited access to international trade networks
• C. High levels of political stability across all countries
• D. Strict government regulations on foreign businesses

Answer: (A)

Verified step by step guidance

1. Understand the concept of Foreign Direct Investment (FDI), which refers to investments made by a company or individual from one country into business interests located in another country, typically involving ownership or control of a business.
2. Identify the key factors that attract FDI to a region, such as natural resources, market size, political stability, and regulatory environment.
3. Analyze Africa's economic characteristics, noting that it is rich in natural resources like minerals and oil, and has a rapidly growing consumer market due to population growth and urbanization.
4. Evaluate the other options: limited access to international trade networks generally deters FDI; high political stability is not uniform across all African countries; strict government regulations usually discourage foreign investment.
5. Conclude that the primary reason Africa has attracted FDI recently is because of its abundant natural resources combined with expanding consumer markets, which offer profitable opportunities for foreign investors.