Foreign investment means an individual or group of business people going to start a business in another country so that they can reap huge profits. I like being involved in such but as a shareholder of a business. An example is the Safaricom, whose origin is United Kingdom. The firm is made to be growing in the East African Countries but being controlled by expertise who have come from its original country. The firm has grown over the past decade and made a marvellous move for its stakeholders and shareholders too. The payout of the dividends was not so bad in the first era when the firm began to dominate and monopolise their goods and services in the region. It provides internet services and mobile products and accessories in the country, making it dominate over many years. The following main factors have led to its growth (explained):
1) Political stability:
In Kenya, Tanzania and Uganda, last decade there has been political stability since the government was able to put into control many political activities preventing war from taking place. When there is ample peace, there is more foreign investment in a country than when there is war. Investors have the fear and discouragement of going to invest in other countries where there is war between tribes of people due ideological differences. Tanzania has been thriving in peace and harmony since the last decade and the country presidential polls did not prevent the country from running its normal businesses. Therefore, the country has seen more of foreign investors visiting the country in order to invest in a peaceful business environment Political stability should always be enhanced as it is one of the main factors which determine success for an investment in a foreign country.
2) Labour skills:
With advanced labour skills, there a big chance for a firm to succeed while if there are less skilled labour, a firm is not likely to succeed in increasing its revenue. Labour skills matter a lot when it comes to establishing a foreign investment. A foreign investment should consist of skilled labour that has been employed or allotted a contract of doing certain job in running a firm or a company. Highly skilled labour is better when it comes to running a firm which is surrounded by many other competitive firms. To produce high quality products, the labour employed or allotted a contract to work should be highly skilled in order to enable a company withstand its competitive environment made by other bug firms.
3) Strength of an economy:
A strong economy is that which has people who can afford to buy goods and services being sold by firms which are already investing in their country. Strength of an economy also matters a lot when it comes to estimating the number of purchases that are likely to be made. People all the time will afford to buy goods and services according to their strength and therefore it is better to have an economy that consists of a high wealth population which has a demand of goods and services in the market. Therefore, firms would generate high revenue from selling goods and services to a high wealthy population.
Infrastructure is having development of roads and means of communication to an efficient state and level to which people or citizens find it easy to travel from one place to another or send a message from one point to another respectively. Roads and railway lines connect people to almost every place in a continent and communication stations help to carry or transmit message PS from one point to another on earth. Therefore, good transport means in infrastructure helps firms to in frustratingly function properly and succeed in generating high revenue. Transport if raw materials from suppliers’, stalls to firms is fast and easy by use of tarmac roads while transmission of messages from one point to another is also fast and easy via Long Term Evolution in mobile devices ( LTE phone).