DETERMINANTS OF FOREIGN DIRECT INVESTMENT INFLOWS TO SUB-SAHARAN AFRICA

Abstract

As government assistance shrinks, foreign investment (FDI) is becoming an increasingly important source of funding for Africa. SSA is the only rising region that has attracted foreign direct investment. Increased returns on investment and improved infrastructure benefit non-SSA countries, whereas SSA countries do not. The goal of the study was to determine what factors influence the flow of foreign direct investment into Sub-Saharan Africa. The analysis was conducted using World Bank World Development Indicators from 1996 to 2020. Both standard least squares and modified ordinary least squares approaches were used in the analysis. According to the conclusions of the study, research and development has a negative impact on investment in Sub-Saharan Africa, whereas human development has a favourable impact. The findings suggest that governments should strengthen and defend policies that assist the private sector in attracting new investment in order to boost economic growth. The country's human capital must be strengthened in order to achieve growth.