An Empirical Analysis of the Effects of Foreign Direct Investment on Domestic Investment in Sub-Saharan Africa: Pre- and Post-Global Financial Crisis

The United Nations Conference on Trade and Development (UNCTAD, 1999), opined that foreign direct investment (FDI) in African states have not been as large as that enjoyed in other nations; the drive, therefore, at the time was to increase the inflows of this source of investment. In recent years, this has been on a steady increase, especially to middle-income countries (UNCTAD, 2013). China, for instance, has increased its activities in resource-rich, developing nations for a number of reasons; one of such is to be able to tap from the abundant resources in these regions, including natural resources, cheap labour, etc. On the other hand, governments of developing countries, in order to grow their economies, have sought to increase the flows of FDI to their economies through measures and policies that encourage FDI, like trade, education, infrastructures, construction of free-trade zones, etc.