Indeed, the immediate benefits of large foreign investments are often oversold. In many respects, foreign investment is not an single event, but rather a process of incremental decisions, made by new companies seeking to enter a market as well as companies already in place, but deciding whether to expand their operations. Rarely, if ever, will a single investment decision be so critical as to set the scene for a country's development. However, investment decisions tend to build on each other, as many of our members can attest, with each company surveying the experience of those who have gone before. As this process unfolds, African governments need to be looking at a number of other steps as they begin to connect to the global economy.
Larger markets are clearly a larger magnet for investment funds.
While Africa has historically been a continent of small markets, linked to former colonial powers and shielded behind walls of protectionism, this situation is changing. Regional organizations offer a ready counter to the small market phenomenon, linking regional neighbors together and offering the prospect of a single and much more attractive market for both investment and trading opportunities. U.S. policies and programs should continue to provide the maximum support possible to African initiatives to enhance this regional integration. Africa's small markets have also led to far higher import barriers than in other developing countries where growth has come more quickly. African governments have tended to depend on taxes from international trade, both for administrative reasons and to protect domestic producers.