ABSTRACT
The debate on the role of Foreign Direct Investment in promoting rapid growth and development of the developing economies remain inconclusive. This paper examined whether FDI still matters in Africa, with the proper utilization of panel data estimation technique on the annual country data that were sourced from world Governance and Development Indicators. Using random and fixed effect model, the results reveals that some important variables such as coefficient of trade openness, rule of law, political stability, capital formation and population positively determined economic growth in Africa, accounting for about 2, 1, 65, 170, and 396.7 percent increase in economic growth. While, FDI and inflation were found to have negative impact on economic growth accounting for 21.4 and 2 percent fall in economic growth over the study period. The study then recommends amongst others formulation and implementation of policies that encourage domestic investment in the continents.
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Key words: Economic Growth, Foreign Direct Investment, Rule of Law, Africa, Panel
Data.