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Working Paper 136 - Determinants of Foreign Direct Investment Inflows to Africa, 1980-2007


Foreign direct investment (FDI), as a key element of the globalization and of the world economy, is a driver of employment, technological progress, productivity improvements, and ultimately economic growth. It plays the critical roles of filling the development, foreign exchange, investment, and tax revenue gaps in developing countries (Smith, 1997; Quazi, 2007). In particular, it can play an important role in Africa‟s development efforts, including: supplementing domestic savings, employment generation and growth, integration into the global economy, transfer of modern technologies, enhancement of efficiency, and raising skills of local manpower (Dupasquier and Osakwe, 2003; Anyanwu, 2003).

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