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The role of development finance institutions in cushioning investments in vulnerable countries

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Written by Isabella Massa

By examining Commonwealth examples from sub-Saharan Africa, this article in 'The Commonwealth Trade & Investment Report 2013' explores how development finance institutions (DFIs) can represent an important tool for building resilience against macroeconomic and financial shocks.

The research shows that Mozambique is one of the most vulnerable countries, partly because of its high dependence on foreign direct investment (FDI). The Gambia, Ghana, Guyana, Tanzania and Zambia are also likely to be affected through declines in FDI.

In some countries, the impact on investment of the current global shocks have already become visible. In Mozambique, for example, Portuguese public investments have been reduced, while in Rwanda, a few foreign investments have been delayed, and in Zambia, Chinese investment pledges have also declined.

Isabella Massa