Foreign Direct Investment in Sub-Saharan Africa

: The Role of International Investment Agreements in Promoting the Rule of Law to Foster Sustainable Development

Abstract

This thesis examines whether international investment agreements (IIAs) can promote sustainable development, with a focus on whether the signing and ratification of these agreements can increase foreign direct investment (FDI) inflows and enhance the rule of law in Sub-Saharan Africa (SSA). The study contributes to the research on international investment law, sustainable development and the rule of law. The research methodology is a mix of theoretical and empirical components. The theoretical component involves a critical understanding of the importance of the rule of law in sustainable development. The empirical component involves the use of rule of law indexes developed by third parties and the conduction of case studies. The study focuses on Sierra Leone and Rwanda, two strategically selected countries in West and East Africa, because of the challenges that they face in attracting FDI and strengthening the rule of law. The research reveals that IIAs do not necessarily lead to an increase in FDI inflows and that they may accentuate challenges for the domestic rule of law in SSA countries, for example, by limiting their policy space, exposing them to costly arbitration claims, and creating imbalances in rights and responsibilities between investors and states. The research proposes several reforms to IIAs, particularly in the context of SSA. It emphasises the need for enhancing the domestic rule of law in host states by adding clauses that protect the rule of law. Specifically, the study suggests that enhancing the rule of law should be established as a distinct and explicit objective of IIAs directly linked to sustainable development. The research calls for SSA countries to review their regional treaties, highlighting the importance of a balanced approach that protects investors while also achieving development goals. Finally, it calls for further research to analyse IIAs, and to explore alternative or complementary approaches to attract and regulate foreign investment.

Date of Award	2025
Original language	English
Awarding Institution	University of Dundee
Supervisor	Sufyan El Droubi (Supervisor) & Ernesto Bonafe (Supervisor)