Abstract
M.A. (Politics)
This dissertation provides an analysis of the relationship between political risk and foreign direct investment (FDI) in the context of the Central African Republic (CAR). Political risk analysis is concerned with those risks that are external to the business and are often a consequence of political and governance actions.
The CAR has experienced instability since its independence from France in 1960. Its political, social and economic environment illustrate a complex case study of a fragile setting that faces the challenge of reconstruction and development with insufficient financial resources. In 2016, Faustin-Archange Touadéra was elected as President of the CAR. Touadéra is the first elected president since Seleka militia overthrew President François Bozize in 2012. The CAR had been transitioning from the civil conflict with Catherine Samba-Panza as the leader of the transitional government. Prior to the coup, there was growing discontent with the then government with opposition groups alleging that government was corrupt and protecting armed groups from the north of the CAR.
The civil conflict has had an adverse effect on FDI. However, some of its sectors remain functional and in some instances, are protected and controlled by rebel groups. This study has revealed that the CAR has a high political risk and this has had an adverse effect on FDI inflow.