ABSTRACT
Successful capital accumulation requires many factors. According to Jorgenson the number of explanations and determinants of investment are limited only by the imagination of the researcher.1 In this sense all of the programmes and action plans of New Partnership for Africa’s Development (Nepad) would affect investment behaviour in Africa. Jorgenson also suggests that in order to make investigation manageable most theories and determinants of investment behaviour must be overlooked.2 In this chapter we propose to divide these factors into three categories in order to allow us to focus on the ones that influence investment in Africa. Shortterm variables such as changes in income, price of capital goods, interest rates, credit availability, exchange rates, and tax rates; medium term variables such as infrastructure, market size, and formal education; and long-term factors such as changes in property rights regime, and changes in the structure of political power.
