The nudge factor: What African investment promotion agencies can learn from Ireland

By Marie-Noelle Nwokolo

When Intel was weighing where to place its European manufacturing footprint in the late 1980s, Ireland was not the obvious pick. As Kingsley Aikins, cofounder of The Diaspora Institute, recalled during a recent Compact with Africa peer-learning session, Intel was leaning toward Scotland, which had a larger market, engineering pipeline, and industrial momentum. Ireland’s response was not to shout louder or discount harder. It asked a better question: what would tip the decision?

The Irish went looking for leverage. They hired professional help, mapped more than 1,000 Irish electronic engineers working abroad, interviewed them, and tested a simple proposition: if Intel came to Ireland, would they come home? Roughly 80% said yes. Presented with that intelligence, Intel changed course.

That is the nudge factor that reshaped Ireland’s industrial trajectory, anchoring a semiconductor ecosystem that continues to generate jobs, tax revenue, and technological spillovers decades later.

That “nudge factor” – credible information that reduced uncertainty, mobilised diaspora networks and changed the internal calculus of an investor – tipped a multi-billion-euro decision in Ireland’s favour.

Today, as countries across Africa and beyond compete for foreign direct investment (FDI), the lesson is clear: investment does not always flow to the loudest marketers or the cheapest jurisdictions.

Countries lose deals less because they lack incentives, and more because they lack execution credibility — the ability to coordinate government actors, solve bottlenecks quickly, and keep promises once the headlines fade.

An event featuring Kingsley Aikins and Martin Russell (The Diaspora Institute) and Tim Costello (Head of Strategy & Chief Economist, IDA Ireland) offered a practical look at how Ireland built that credibility, and what African IPAs might rethink.

Reinvestment Is Not a Side Quest. It’s the Main Game.

IDA Ireland shared a striking fact: around 70% of the investments it secures each year come from companies already operating in Ireland. That number should make IPA leaders pause.

Too many agencies optimise for attraction theatre — new logos, press releases, MoUs — while treating aftercare as an administrative function. IDA Ireland flips that logic. The priority is not winning a first deal; it is making the first deal succeed, then earning the second.

In practice, this means structured aftercare: dedicated relationship managers, regional support teams, technical “transformation” units focused on innovation, sustainability, and talent, and continuous engagement with corporate headquarters. These are not framed as reinvestments but as expansion investments, and they form the backbone of performance.

This matters in today’s risk-averse global environment. While FDI numbers have been decreasing, in 2025, UNCTAD noted that the resilience of reinvested earnings helped prevent an even steeper global FDI decline, as companies prioritised investing in existing operations over riskier or more expensive new acquisitions. In other words, expansion capital is now more reliable than greenfield courtship.

Ecosystems Beat Incentives, Especially When Money Is Tight

IDA Ireland’s approach also challenges a familiar policy reflex which often involves competing on tax breaks, grants, or headline incentives. Instead, Ireland emphasizes ecosystem strength: talent pipelines, research institutions, infrastructure readiness, policy stability, and peer-to-peer credibility.

Companies are often introduced to other investors who have already succeeded in Ireland, allowing prospective entrants to verify claims firsthand. That reference effect matters because investors trust evidence more than brochures.

IDA Ireland’s grant model reflects the same discipline. Support is milestone-based — jobs created, R&D delivered, capital deployed – and aligned with policy priorities such as innovation, decarbonisation, and regional development. Grants reinforce strategy; they do not replace it. For fiscally constrained countries, this is liberating: you may not outspend competitors, but you can out-execute them.

 Utilities and Permits: The Quiet Place Where Deals Go to Die

A practical insight from IDA Ireland concerned infrastructure and utilities. IDA operates on two levels. First, a strategic layer: anticipating long-term demand for energy, water, and infrastructure, and feeding that into national planning. Second, an operational layer: hands-on coordination when investors need site visits, grid connections, permits, or cross-agency alignment.

Many who have been involved in efforts to help investor deals materialise can attest to the norm that this is where many African investment stories fail, not at the pitch stage, but in the messy middle: power delays, permit bottlenecks, and inter-ministerial fragmentation. The data underscores the cost of delay.

In Ghana, for example, it takes an average of 30 days to obtain a construction-related permit (if one is lucky and no queries are raised), and up to 132 days on average to receive payment under a government contract – nearly double the regional benchmark of 67.5 days. These are not procedural inconveniences. They are negative incentives.

In today’s FDI market, speed is policy. When approvals drag, it signals institutional weakness, raises perceived risk, and quietly pushes investors elsewhere. You can announce a one-stop shop, but investors will believe it only when it behaves like one. The original idea behind one-stop shops was sound: consolidate services, reduce friction, and accelerate decision-making.

But, in many countries, the concept has been distorted into a bureaucratic bottleneck. Instead of becoming problem-solving hubs, these offices have evolved into problem-accumulating depots where responsibility is centralised, but accountability is not. Quite literally the one-stop shop it seems.

Diaspora Is Not Sentiment. It’s Commercial Leverage.

Kingsley Aikins of the Diaspora Institute framed diaspora capital as three flows: people, resources, and knowledge. The point is not nostalgia; it is strategic advantage.

Africa already sits on a massive, under-leveraged asset. As of 2020, a conservative estimate is that 40.4 million Africans lived outside their countries of origin. Estimated remittance flows into Africa, according to World Bank data, reached $96.4 billion in 2024, rivalling FDI at $97 billion.

More importantly, a sizeable number of them are based in multinational firms, global financial institutions, and frontier technology sectors. This is not a soft-power story. It is a commercial intelligence network.

Why? Diaspora professionals can validate investor confidence, surface deal-relevant information, strengthen talent pipelines, and act as “tipping agents” who nudge corporate decisions in one country’s favour over another. The Intel story is not inspiration. It is proof of mechanism.

A Harder Truth for African IPAs

This piece is not to romanticise Ireland or ignore Africa’s constraints – fiscal pressure, infrastructure gaps, political volatility, and bureaucratic fragmentation are real. Those constraints, however, make execution discipline more critical, not less.

The next frontier, thus, for African IPAs may not be simply winning new investors, but also stopping existing ones from quietly giving up. Doing business in Africa is hard, understandably so, but we can help make it easier and better for investors bold enough to face the continent’s challenges.

In a world where global FDI is shrinking, execution is no longer “operations”; it is strategy. UNCTAD reports that global FDI fell 11% in 2024 on a comparable basis and warns that early 2025 activity indicators hit record lows, with international project finance down 26% – the kind of capital many African infrastructure and industrial bets depend on.

At the same time, the OECD notes that announced greenfield capital expenditure in emerging and developing economies fell in Q2 2024 to its lowest quarterly level in the past two years.

Again, in this context, our ability to do more with what we have and be an effective enabler is not a nice-to-have feature. It should be policy. Because every delayed permit, stalled utility connection, or unanswered investor escalation functions like an incentive – just a perverse one – raising perceived risk and pushing headquarters to (re)invest elsewhere.

Four Lessons African IPAs Should Take Seriously

1. Reinvestment may beat deal-hunting. Your most bankable next investment is often from a company already on the ground,  if you help it succeed.
2. Ecosystems outperform subsidies: Talent, infrastructure readiness, and peer credibility often matter more than headline incentives.
3. Diaspora is an asset class: Treat it as intelligence, influence, and deal-shaping leverage, not ceremonial outreach.
4. Execution is the real competitive advantage: Speed, coordination, and problem-solving determine who wins tight FDI races.

Ireland did not win Intel or the decades of follow-on investment by chance. It built a system capable of identifying leverage, mobilising networks, and delivering on promises. A question, uncomfortable as it may be, for African IPA leaders is this: how many “lost deals” were a result of your own implementation lag?

In the game of foreign direct investment, second place gets nothing. And in too many African bureaucracies, “second place” is what happens when an investor meets month four of an eleven-month permit process.

Marie-Noelle Nwokolo is a researcher, analyst, and development practitioner with a focus on job creation, good governance, investment promotion, and private-sector growth. She writes in her capacity as a concerned Ghanaian citizen.

Post Views: 1