NEXUS BETWEEN FOREIGN CAPITAL INFLOW, POVERTY AND ECONOMIC GROWTH AMONG SELECTED WEST AFRICA COUNTRIES: A SECTORAL APPROACH
DOI:
https://doi.org/10.51200/mjbe.v11i1.5289Keywords:
foreign capital inflow, poverty, economic growth, Random Effect Model, Fixed Effect ModelAbstract
In the selected West African nations, issues concerning foreign capital inflows, poverty, and economic growth are complex and multifaceted. These issues encompass reliance on commodity exports, fluctuations in foreign capital inflows, debt burdens, corruption, poor governance, and lack of diversification. Therefore, understanding the nature of these challenges is both relevant and imperative. Consequently, this paper investigates the relationship between foreign capital inflow, poverty, and economic growth in the chosen West African countries. To estimate the model, the study employs a Random Panel model. The findings reveal, among other things, that foreign capital inflows have a beneficial impact on the agricultural, health, and educational sectors in the selected West African nations. It is recommended that in order to support sustainable development and reduce reliance on external expertise, foreign investors should be encouraged to engage in technology sharing, skills transfer, and local capacity building, particularly in the agricultural and industrial sectors. Additionally, incentives should be tailored to attract foreign investment in sectors where these nations excel. This may include measures such as land access, tax breaks, and other sector-specific advantages.
References
Abdullahi, I.S., Garba, M. & Magaji, I. (2017). Impact of foreign capital inflow to the growth of the economies of sub-Saharan Africa. International Journal of Economics and Financial Management, 2(2), 31-28.13
Adebayo,A.R &Oluwaseun, O.S. (2020). International Capital Inflow and Sub-Saharan African Economy: Does Capital Inflow Lead Growth? Growth, 7(1), 26-34.
Adekunle, W., & Sulaimon, M. (2018). A Re-examination of the relationship between foreign capital flows and Economic growth in Nigeria. African Development Finance Journal (ADFJ), 1(2).1-17.
Adeola, O.O. (2017). Foreign Capital flow and Economic Growth in Selected Sub-Saharan African Economies. Being a Dissertation presented for the degree of Doctor of Philosophy in Development Finance (Faculty of Economics and Management Sciences) at Stellenbosch University.
Arogundade,S., Mduduzi, B & Eita, H.(2022). Foreign direct investment and poverty in sub-Saharan African countries: The role of host absorptive capacity. Cogent Economics and Finance, 10(1).
Asiedu, E. (2002). On the Determinants of Foreign Direct Investment to Developing Countries: Is Africa Different? World Development, 30(1), 107-119 .
Awad, A. (2021). Foreign capital inflows and economic growth: the experience of low-income countries in Sub Saharan Africa. Journal of Chinese Economic and Foreign Trade Studies, 14(3), 225-239. https://doi.org/10.1108/JCEFTS-07-2020-0028.
Dada, J.T & Akilo, T.(2021). Foreign direct investment and poverty reduction in sub-Saharan Africa: does environmental degradation matter? Future Business Journal, 7(21).
Easterly, W. (2001). The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics. MIT Press.
Fagbemi, F & Olufolahan, T.J. (2019). Capital inflows, financial development and poverty reduction in Nigeria. Munich Personal RePEc Archive. MPRA Paper No. 112784.
Githaiga, P.D & Kilongi, A.W. (2023). Foreign Capital flow, Institutional quality and human capital development in sub-Saharan Africa. Cogent Economics and Finance, 11(1).
Guo, Z. Y., & Luo, Y. (2017). Credit constraint exports in countries with different degrees of contract enforcement. Business and Economic Research, 7(1), 227-241.
Gupta, S. (2010). Relevance of Good Governance to Development. Finance & Development, 47(1).
Huong, N.L.T. (2022). Impacts of Foreign Direct investment on Economic growth in Vietnam. Banking Academy of Vietnam. Journal of Economic and Banking Studies, 4, 1-15.
Iwegbu, O & Dauda, R.O.S. (2022). Effectiveness of Foreign Aid in poverty reduction in Africa. The role of fiscal policy. CBN Journal of Applied Statistics, 13(1), 55-92.
Lawal,N.A., Adegun, E.A., Aderemi, T.A & Dauda, R.O.S.(2022). Migrant Remittances, Growth and Poverty reduction: ARDL-Bounds test and Granger Causality Approach. Izvestiya Journal of Varna University of Economics, 1(2), 74-90.
Musakwa,M.T., Odhiambo, N.M & Nyasha, S. (2021). The Impact of foreign capital inflows on poverty reduction in Vietnam: An empirical investigation. Croatian Review of Economic, Business and Social Statistics (CREBSS), 7(2), 31-49.
Nguyen, N. T. K. (2017). The long run and short run impacts of foreign direct investment and export on economic growth of Vietnam. Asian Economic and Financial Review, 7(5), 519-527.
Olowookere, J.K., Oluwole, S.O., Mabinuori, O.T. & Aderemi, T.A. (2020). Foreign Capital Inflows and Poverty Reduction in Nigeria: Implication for Sustainable Development. Euroeconomica. 3(39), 33-41.
Oluwaseyi, M. H., Abdullah, H., Mahmood, S., Ismail, S., & Yusuf, H. A. (2017). The impact of foreign capital inflows on economic growth in selected West African countries. American Journal of Innovative Research and Applied Sciences, 4(3), 96-104.
Oshikoya, T. (2003). Macroeconomic Stability and the Role of Foreign Aid in Sub-Saharan Africa. African Development Review, 15(2-3), 169-193.
Padhan, H., Behera, D.K. & Sahu, S.K. (2023). Does Corruption Hinderance Economic Growth Despite Surge of Remittance and Capital Inflows Since Economic Liberalization in an Emerging Economy, India. J Knowl Econ 14, 426–449. https://doi.org/10.1007/s13132-021-00876-w.
Sikandar, F., Erokhin, V., Wang, H., Rehman, S. & Ivolga, A. (2021). The Impact of Foreign Capital Inflows on Agriculture Development and Poverty Reduction: Panel Data Analysis for Developing Countries. Sustainability, 13(6), 3242; https://doi.org/10.3390/su13063242. Sothan, S. (2017). Causality between foreign direct investment and economic growth for Cambodia. Cogent Economics & Finance, 5(1), 1277860.
Waweru, G., & Ochieng, D. E. (2017). Effects of capital flows on economic growth in Kenya.
World Bank. (2001). World Development Report 2000/2001: Attacking Poverty. World bank.
Downloads
Published
Versions
- 2024-06-30 (2)
- 2024-06-30 (1)
How to Cite
Issue
Section
Total Views: 62
| 
Total Downloads: 11
