AUTHOR: OKEYIKA KENECHUKWU OKEZIE
AFFILIATION: NNAMDI AZIKIWE UNIVERSITY, AWKA
Motivated by the slow pace of growth in the region vis-à-vis the amount of Foreign Direct Investment (FDI) received. This study takes a look at the effect of FDI on economic growth in Sub-Saharan Africa (SSA). The study also went further to see if FDI affects domestic savings in SSA. Utilizing panel data for 45 SSA countries [for the selected, relevant predictors] for a period of four (4) decades; by way of pooled regression, it was found that: FDI has a negative significant effect on growth (especially for the countries with high FDI inflows), while on the other hand have a significant positive effect on domestic savings in SSA (most especially for the countries with high FDI inflows). It is also discovered that capital formation, labour force, net export, and government expenditure are all determinants of growth in SSA. Following this findings the study recommends that Effort should be geared in attracting foreign capital into other growth- inducing sectors of the economy, especially the manufacturing and agricultural sectors. These two sectors have high potentials for growth if adequately funded, among others.
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Tags: Agricultural Sector, Big Push Model, Cross Border Merger/Acquisition, Demand Indivisibility, Dependency Theory, Descriptive Statistics, Domestic Savings, Economic Growth, Economics-Thesis-2012, F-Test, Foreign Direct Investment Flow, Foreign Direct Investment Types, Greenfield Investment, Growth Concept, Harrod-Domar Model, Integrative Theory, Joint Ventures, Labour Force., Macro-Economic Policies, Manufacturing Sector, Modernization Theory, Pau Rosenstein-Rodan, Political Stability, Primary Sector, Product Cycle Theory, Production Indivisibility, Savings Supply Indivisibility, Standard Error Test, T-Test, Transnational Corporations, Two-Gap Model, World Investment Report