This article assesses how African states should regulate Foreign Direct Investment (FDI). In particular, it focuses on whether African states should employ or avoid performance requirements as mechanism of regulation of FDI. The imposition of performance requirements, also known as operational requirements, in IIAs remains controversial. There is no consensus either on their effectiveness in helping countries to promote development, or in their distorting effects. Some host developing countries consider performance requirements to be an effective policy tool for enhancing the benefits of FDI and consider their disciplining to be undue interference with their policy space. In this paper argues that African states should use performance requirement in the course of their investment regulation with due care than avoiding it at all. .The paper is doctrinal, thus, many literatures relating to the topic and the practice of some countries are analyzed. The paper concludes that the usage or imposition of such measures should be in manner that it cannot deter the future FDI inflow. African states should focus on regional cooperation than competition and this cooperation should go to the extent of having common model investment treaty.
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