The impacts of fdi on environment in Ethiopia: the case of oromia special zone surrounding finfinne

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.