Abstract:
Foreign Direct Investment (FDI) plays an important role in economic growth host countries as
an engine of employment, instrument of technology transfer, capital accumulation, productivity
enhancement and the like. The government of Ethiopia is promoting FDI to make benefits
accruing from it. Although it has economic benefits, there are also different problems associated
with FDI such environmental problems.
The essence of this research is analyzing the impacts of FDI on the environment in Oromia
Special Zone Surrounding Finfinne together with the FDI and environmental regulatory
frameworks of the country.
The study employed mixed research methods where doctrinal and qualitative were used in the
analysis. Interviews and questionnaires were used to gather data from experts and officials at
federal, regional and zonalinvestment and environmental bodies.
The result of the study showed that FDI is causing major environmental problems in Oromia
Special Zone Surrounding Finfinne. It also showed the failure of regulatory bodies to properly
implement investment and environmental laws as the main causes for environmental damages
accruing from FDI. Therefore, regulatory bodies are required to implement existing laws as
effectively and efficiently as possible to reap the benefits of FDI and at the same time avoiding or
mitigating its negative effects on the environment.
