Labour standards and foreign direct investment: A perspective on the exportoriented garment sectors in selected sub-Saharan African countries

Authors D Collier and S Godfrey

ISSN: 1996-2088
Affiliations: Attorney of the High Court, Associate of the Institute of Development and Labour Law, Head of the Department of Commercial Law, University of Cape Town; Co-ordinator of the Labour and Enterprise Policy Research Group, Department of Commercial Law, University of Cape Town
Source: Acta Juridica, 2018, p. 183 – 209


This essay considers the relationship between foreign direct investment (FDI), labour markets and labour regulation. The essay discusses the difference between vertical (efficiency-seeking) FDI and horizontal (market-seeking) FDI, and the likely dynamics between these different types of FDI and labour markets and labour relations. Lesotho and Ethiopia are discussed as examples of how FDI interacts with labour standards and labour market regulation in the context of sub-Saharan Africa. The essay argues for policy orientation in developing countries in Africa to attract a more beneficial type of investment that balances the interests of investors with those of the host country and its workforce. The essay concludes with the observation that the development of regional value chains in the context of the AfCTA should be pursued.