Journal of
Economics and International Finance

  • Abbreviation: J. Econ. Int. Finance
  • Language: English
  • ISSN: 2006-9812
  • DOI: 10.5897/JEIF
  • Start Year: 2009
  • Published Articles: 363

Full Length Research Paper

Impact of foreign direct investment and inflation on economic growth of five randomly selected Countries in Africa

Adeniyi Foluso Opeyemi
  • Adeniyi Foluso Opeyemi
  • Chartered Institute of Management Accountant (CIMA) Nigeria, No 2 Turnbull Road, Onikoyi, Ikoyi, Lagos, Nigeria.
  • Google Scholar

  •  Received: 12 February 2020
  •  Accepted: 16 March 2020
  •  Published: 30 April 2020


Foreign Direct Investment (FDI) has been viewed as a major source of finance for developing countries and it has gained significant momentum since the sweep of globalization in the early 1990. This is because most of the developing countries see FDI as important in their strategy for growth. In this study, the impact of FDI and inflation on economic growth was examined. Five countries in Africa were selected randomly for the study. The variables used for this study are inflation rate, GDP per capita (economic growth), and FDI inflows. The study relied on IMF Data Mapper and UNCTAD stat for a period of 23-year time series 1996 to 2018 as the source of data for the study. Lastly unit root test and regression analysis were employed to estimate the objective of the study and output showed that FDI has a positive impact on economic growth in all the five countries under review. Except Egypt, Inflation has a negative impact on economic growth in four out of the five countries reviewed. This study recommended that Government should endeavor to create conducive environment that will enable FDI to thrive and also look into policies that will regulate money supply to encourage low and stable inflation rate, in order to absorb the maximum benefits of FDI inflows.
Key words:  Economic growth, FDI, inflation, 5 randomly selected countries in Africa.