The Importance of Foreign Direct Investment (FDI) on The Economic Development of Oshikango Town

ABSTRACT

This thesis’ main research issue was: The importance of Foreign Direct Investment (FDI) on the economic development of Oshikango in particular. It focused on the impact of FDI at the local economy level by assessing the indirect and direct benefits of FDI firms to the local people. This thesis used the Developmentalism model of FDI and the theory of Product Life Cycle, propounded by Raymond Vernon, to address the main research issue. These models provide the contribution of FDI as mainly thought of in terms of local capital, technology, and management expertise development. A methodological perspective dictated by the nature of this study during data collection was the qualitative research approach. This approach triggered the use of a qualitative methodology to collect data using questionnaires and structured interviews as well as secondary data of trade statistics. A sample size of 20 participants, that of, twenty participants, (15) FDI companies and five (5) FDI firm managers in Oshikango. These participants completed questionnaires and participated in interview sessions respectively. This thesis provides evidence that FDI has more than doubled its impact on the upgrading of local industry, creation of employment, competitive effects, infrastructural development, experience and skill transfers, corporate social responsibility and collaborative agreements in Oshikango. In the same vein, FDI operations were noted to be confronted by various challenges such as local labour laws, lack of statutory intervention, poor local infrastructure and economic fluctuations such as those related to foreign exchange. The findings suggest the role of government policy in the process of improving FDI through directive industry policy and the provisioning of an investment vi environment which is stable politically and economically. Overall, the findings in this thesis relating to FDIs and the impact they bring in Oshikango provide policy makers with a better understanding of the nature and outcomes of interaction between foreign investors and local economic benefits. In general the findings of the study point to the fact that Oshikango has been a home of FDI. However certain trends such as lack of government intervention, stringent laws, and economic tumble among others have dragged progress and hence discourage investors. Aside this, the local economy has been found to benefit immensely through job creation, infrastructural development and various social responsibility programmes.