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Impact of Foreign Investment on Macro-Economic Variables in Selected West-African Countries
Subject area: Arts, Social Sciences and Humanities · Area of research: Economics
DOI: https://doi.org/10.64388/IREV9I10-1717004
Abstract
This study examines the impact of foreign investment on macro-economic variables in selected West-African Countries over the period 1990–2020. Panel data analyses with the Random Effects model were utilized. The research investigates the influence of foreign capital inflows on economic growth and inflation rates, among other variables. Descriptive and trend analyses revealed a significant fluctuations in key indicators, with all variables stationary at levels according to the Im-Pesaran-Shin test. Results indicate that FDI significantly promotes economic growth and inflation, although the effects of PFI and ODA vary across countries. The findings suggest that foreign investment played a vital role in fostering sustainable development and macroeconomic stability within the region. Policy implications emphasized the importance of managing foreign capital flows effectively to maximized growth benefits while maintaining price stability. This study contributes valuable insights for policymakers seeking to harness foreign investment for regional development in West Africa.
Keywords
Foreign Investment, Portfolio Foreign Investment, Official Development Assistance, Macroeconomic Variables, West Africa, Economic Growth, Inflation
References
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[2] African Development Bank. (2022). West Africa Economic Outlook 2022. https://www.afdb.org/en/documents/west-africa-economic-outlook-2022
[3] Dabiri, O., & Oladipo, O. (2022). Institutional quality and the impact of FDI on economic growth in West Africa. African Journal of Economic Review, 10(2), 56-74.
[4] IMF. (2023). World Economic Outlook Update. https://www.imf.org/en/Publications/WEO/Issues/2023/04/11/world-economic-outlook-april-2023
[5] Nkrumah, J., & Boateng, R. (2023). Inequality and foreign direct investment in West Africa: An empirical assessment. Development Policy Review, 41(1), 89-107.
[6] OECD. (2023). Foreign direct investment and economic development in West Africa: An overview. OECD Development Centre Working Paper No. 456. https://doi.org/10.1787/ae7f7a9a-en
[7] Prasad, E., Rajan, R., & Subramanian, A. (2018). Effects of FDI on economic growth: Evidence from West Africa. World Bank Policy Research Working Paper No. 8564. https://doi.org/10.1596/1813-9450-8564
[8] Rappaport, J. (2019). FDI and growth in Africa: An empirical analysis. African Development Review, 31(2), 200-215.
[9] Subramanian, A. (2018). The impact of foreign direct investment on economic growth: Evidence from West Africa. Economic Modelling, 70, 125-135.
[10] Tille, C. (2018). FDI and economic growth: Lessons from West Africa. Journal of International Economics, 112, 45-62.
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[12] World Bank. (2024). Foreign Investment and Development in West Africa: An Analytical Review. World Bank Publications.
How to cite this paper
@article{1717004,
author = {Eze Joy Unekwuojo (Ph.D), Hassan Emmanuel Anthony (Ph.D)},
title = {Impact of Foreign Investment on Macro-Economic Variables in Selected West-African Countries},
journal = {Iconic Research And Engineering Journals},
year = {2026},
volume = {9},
number = {10},
pages = {3775-3786},
issn = {2456-8880},
url = {https://www.irejournals.com/formatedpaper/1717004.pdf},
abstract = {This study examines the impact of foreign investment on macro-economic variables in selected West-African Countries over the period 1990–2020. Panel data analyses with the Random Effects model were utilized. The research investigates the influence of foreign capital inflows on economic growth and inflation rates, among other variables. Descriptive and trend analyses revealed a significant fluctuations in key indicators, with all variables stationary at levels according to the Im-Pesaran-Shin test. Results indicate that FDI significantly promotes economic growth and inflation, although the effects of PFI and ODA vary across countries. The findings suggest that foreign investment played a vital role in fostering sustainable development and macroeconomic stability within the region. Policy implications emphasized the importance of managing foreign capital flows effectively to maximized growth benefits while maintaining price stability. This study contributes valuable insights for policymakers seeking to harness foreign investment for regional development in West Africa.},
keywords = {Foreign Investment, Portfolio Foreign Investment, Official Development Assistance, Macroeconomic Variables, West Africa, Economic Growth, Inflation},
month = {April},
doi = {https://doi.org/10.64388/IREV9I10-1717004}
}