In Africa, foreign firms are often disconnected from local ones

IN 2016 DANIEL KINUTHIA started a small business in Kenya making shoe uppers for the local subsidiary of Bata, a multinational footwear company. He was short of finance and equipment, and his contract with Bata ended when covid-19 hit. But he says supplying Bata and visiting its factory taught him “what happens, how the shoe is marketed, the kind of shoe that can be sold”. Now he dreams of using those skills to build a factory of his own.Many African governments are keen to attract foreign investment. But its impact hinges on what Albert Hirschman, a post-war economist, called “linkages”. By supplying or buying from multinationals, local firms like Mr Kinuthia’s can learn about markets and technology. Such linkages are all too rare in Africa, however. Many multinationals ship in their inputs and export what they produce. That brings jobs and dollars, but does not spur development.