Africa's performance in attracting Foreign Direct Investment (FDI) has been extremely disappointing. Where does the blame lie? Is it a case of Africa failing to impress foreign investors because of its poor record on stability, democracy and corruption? Or, on the other hand, are western investors mired in out-dated views of the continent? There is some evidence that investors continue to look at Africa in colonial terms. The colonists imposed an economic model on Africa in the 19th century by concentrating totally on its resources as a supply of wealth to the imperial powers. This attitude is reflected today in the fact that the bulk of the $18 billion invested in Africa in 2004 went to the exploitation of natural resources.

In a global perspective the entire continent of Africa has been getting little more than three percent of the world total. This is less than the FDI to the single Asian country of India. There are risks in investing in Africa just as there are risks in investing in anywhere else. But where are the risk takers?

Increasingly the answer to this question is a simple one. The risk takers are coming from Asia. A pattern has developed of western money flowing into the tiger economies of the Asian continent and creating wealth in that region. Asia is becoming a wealthy region and is looking around for areas in which to invest its new-found wealth. Having no colonial hang-ups as far as Africa is concerned Asian investors appear more willing to put their money into African industry.

Many of the worries ingrained in Western minds about African instability and corruption may have had some validity in the past but recent developments should have had a far greater impact on western perceptions. Democracy and probity are taking root. Nigeria and DR Congo have made significant moves towards democratic standards. In South Africa progress has been little short of dramatic.

Men who had been heroes of the struggle to overthrow the Apartheid Regime have been held to account despite their personal popularity. Most recently Tony Yengeni, former chief whip of South Africa's dominant African National Congress (ANC) began a four-year prison sentence because he availed of discount on the purchase of a top-of-the-range car. The sentence sends a message to the west that corruption in the form of bribes accepted by South African officials, not to mention corruption in the form of bribes offered by Western business, will no longer be tolerated.

African Investment-Promotion Agencies (IPAs) must also shoulder some of the blame. Their efforts to attract FDI, particularly from Western nations, have simply not borne fruit. African countries are beginning to realise that future investment may not come either from the West or from Asia but from within Africa itself.

Countries such as Nigeria, Ghana, Angola and others including the Mediterranean countries of North Africa have the potential to join South Africa as potential investors within Africa. Revenues from mineral and energy resources in one region of Africa can boost the economies of those countries traditionally dependent on monoculture cash crops.

Agribusiness, food-processing and general manufacturing have been identified, particularly by South African businesses, as possible targets from intra-African FDI. But how can major investors from developed countries be encouraged to play a developmental, and ultimately profitable role, in Africa?

Ralph Goodale, Canada's Finance Minister, speaking at the Chatham House organisation in London in 2005 stressed that governments could and should use their influence.

"Global FDI is consistently larger than aid flows from donor countries. In 2002, net private capital flows to developing countries were more than three times the net official development assistance- about US$150 billion in FDI compared to US$50 billion in aid. Donor countries like Canada must find ways to encourage our firms to do more business in Africa. By promoting the ways and means to allow more and more partnerships between firms in Africa and firms abroad, we simultaneously bolster Africa's trade capacity while contributing to the economic sustainability of their indigenous private sectors. "

The more often other developed countries adopt similar attitudes the brighter Africa's prospects will become in the context of international trade.