The impact of foreign investment in financing sustainable development in Sub‑Saharan African countries

Tijani Forgor Alhassan (), Eugenia Owusu Ansah (), Shakizada U. Niyazbekova () and Tatiana K. Blokhina ()
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Tijani Forgor Alhassan: Moscow Polytechnic University, Moscow, Russia
Eugenia Owusu Ansah: HSE University, Moscow, Russia
Shakizada U. Niyazbekova: Financial University under the Government of the Russian Federation, Moscow, Russia
Tatiana K. Blokhina: Lomonosov Moscow State University, Moscow, Russia

Russian Journal of Economics, 2024, vol. 10, issue 1, 60-83

Abstract: This study outlines the features of financing investment development in Sub-Saharan African countries. Using the financial determinants of GDP, a model was developed based on the method of least squares employing data covering 2004–2018. It was revealed that a positive correlation exists between economic growth and bank loans as well as official development assistance. The results of the model indicate that bank loans and remittances significantly increase economic growth. However, both foreign direct investment and official development assistance (ODA) were found to be ineffective in promoting development, and this is attributable to its investment model (resource-seeking) and the conditions under ODA financing, respectively, in the region. Bank loans were found to be the most influential in promoting sustainable growth in the region. Hence, it is instructive that the reforms are needed and incentives are to be developed to improve the level of the region's financial and banking sector development and facilitate the sustainable socioeconomic development of these economies.

Keywords: Sub-Saharan; Africa; funding; investment; foreign; direct; investment; special; economic; zones; grants; foreign; capital; flow; domestic; resources; investment; development. (search for similar items in EconPapers)
JEL-codes: E01 E22 G10 O11 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:arh:jrujec:v:10:y:2024:i:1:p:60-83

DOI: 10.32609/j.ruje.10.105745

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