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The drivers of foreign direct investment in the economies of the Sub-Saharan Africa
Nmadabuchukwu Akwari, Francis
The thesis thoroughly investigates the relationship between the determinants (e.g. infra-structural quality, labour availability, trade openness, inflation and market size) and the foreign direct investment inflow to the Sub-Saharan Africa. The study uses the annual and balanced panel data of ten (10) countries that are randomly selected from the sub regional group in Africa based on similar economic size over a time period from 2011 to 2015. In addition, the study employs the pooled OLS method to test and estimate the relationship among the economic variables involved and Gretl (2017) is used as the sta-tistical software tools to perform the data analysis. The findings of the research study show very clearly that only infrastructural quality has a positive and statistically signifi-cant effects on the foreign direct investment; while other economic variables (e.g. trade openness, inflation and market size) have positive; but statistically insignificant impacts on the foreign direct investment inflow to the economies. In addition, labour availability has a negative and statistically insignificant effect on the foreign direct investment. The conclusion is that the infrastructural quality is the major determinant of the foreign di-rect investment; while trade openness, labour availability, inflation and market size have little or no influence on the foreign direct investment inflow to the sub regional group-ing. Based on this findings, the thesis suggests massive investment in infrastructure; more robust economic integration in the region; pursuit of favourable and reciprocal bi-lateral trade agreement with trading partners; heavy funding for education, training and research and development; implementation of all round Pan Africanist initiative pro-grammes at the national levels that will ensure effective collaboration between African professionals in the diaspora and the local professionals for capacity building of the local experts and implementation of the right balance of the monetary, structural and fiscal policies to drive and sustain the inflow of the foreign direct investment for all round sustainable economic growth and development in the region.
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