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Archaeology & Anthropology: Open Access

Geographical and Policy Factors in Foreign Direct Investment Inflows to Africa

  • Open or Close Oluremi Ogun1*, Afees Salisu2, Afolabi Olowookere3, Fatai Ogunlana4 and Chris Ofonyelu5

    1Professor of Economics, University of Ibadan, Nigeria

    2Senior Lecturer,International Training Institute, Nigeria

    3Head of Research, Securities and Exchange Commission, Abuja, Nigeria

    4Fatai Ogunlana, Senior Lecturer, Lagos State University, Nigeria

    5Lecturer Adekunle Ajasin University,Akungba-Akoko, Nigeria

    *Corresponding author: Oluremi Ogun, Department of Economics, University of Ibadan, Ibadan, Nigeria

Submission: August 18, 2017; Published: May 30, 2018

DOI: 10.31031/AAOA.2018.02.000529

ISSN: 2577-1949
Volume2 Issue1


This paper analyzed the geographical and policy factors determining Foreign Direct Investment (FDI) inflows to four regions of Africa over the period 1980 to 2010. Based on the eclectic paradigm, a gravity model and threshold procedure, the paper found that geographical factors were the main attraction for FDI inflows to most regions of Africa. However, FDI would flow more to countries with lower level of inflationary tendencies. This pattern cuts across different models. Fiscal deficit ratio of less than 3.3% and inflation rate of less than 10% maximized the geographical advantage. Beyond these thresholds, FDI inflows to Africa appeared discouraged.

Keywords: FDI; Capital inflow

JEL Code: F2

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