Concerns about ‘divestment’ trend
A 2019 report by Ernst & Young found that about 84% of surveyed firms (85% American, 82% Asia-Pacific, and 84% of Europe, Middle East and Africa) were planning to divest at least some of their operations within the next 2 years. Divestment refers to the sale or liquidation of foreign affiliates by multinational enterprises in a host economy. It is the opposite of foreign direct investment and is coming to the fore as many firms react to geopolitical uncertainties such as COVID, Brexit and competition between China and the USA.
Little information or data is available about divestment despite its importance. This makes it difficult to get a clear picture of trends in foreign divestments in developing countries in general and Africa in particular.
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