F02

International Economic Order

Foreign Direct Investment, Sectoral Effects and Economic Growth in Africa

Earlier studies on the impact of foreign direct investment (FDI) on economic growth have not been instructive largely on their failure to examine the sectoral transmission channels through which FDI affects overall growth. We re–examine the impact of FDI on economic growth in Africa relying on panel data from 38 African countries over the period 1960–2014. Results from the system generalised method of moments (GMM) reveal that, while FDI positively and unconditionally spurs economic growth, its growth–enhancing effect is imaginary when the conditional sectoral effects are introduced.

Is There a SADC Business Cycle? Evidence from a Dynamic Factor Model

Countries that adopt a common currency automatically relinquish their monetary policy autonomy. Hence, it is imperative for countries wanting to join a currency union to ensure that their business cycles are synchronized in order to ensure symmetric propagation of the effect of monetary policy. Put differently, countries with asynchronous business cycles require country-specific policies to stabilize their economies. Thus, in this study we assess the readiness of the SADC region to adopt a single currency in 2018 as proposed.

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