Abstract:
Historically, a major portion of foreign direct investment (FDI) flowed between and within industrialized countries. Over the last several decades, FDI, which had not been in developing countries, also started, and its proportion increased consistently. Developing countries have a greater need for FDI because they are still lagging behind in several aspects of economic development. The study was conducted because the subject of FDI in Africa is under researched, even though it is a fact that FDI has positive impacts on growth and development on the continent. The study was conducted because it is important to understand factors that affect the determination of FDI direction in relation to the African continent. The study aimed to determine the role of infrastructural amenities on the attractiveness of Southern Africa Development Community (SADC) countries to inflow of FDI. Due to the unavailability of data in some SADC member countries, only the following countries were included in the sample Angola, Botswana, DRC, Lesotho, Malawi, Mauritius, Mozambique, Namibia, South Africa, Tanzania, Zambia and Zimbabwe.
A quantitativeHistorically, a major portion of foreign direct investment (FDI) flowed between and within industrialized countries. Over the last several decades, FDI, which had not been in developing countries, also started, and its proportion increased consistently. Developing countries have a greater need for FDI because they are still lagging behind in several aspects of economic development. The study was conducted because the subject of FDI in Africa is under researched, even though it is a fact that FDI has positive impacts on growth and development on the continent. The study was conducted because it is important to understand factors that affect the determination of FDI direction in relation to the African continent. The study aimed to determine the role of infrastructural amenities on the attractiveness of Southern Africa Development Community (SADC) countries to inflow of FDI. Due to the unavailability of data in some SADC member countries, only the following countries were included in the sample Angola, Botswana, DRC, Lesotho, Malawi, Mauritius, Mozambique, Namibia, South Africa, Tanzania, Zambia and Zimbabwe.
A quantitative research was conducted using secondary panel data collected on SADC countries from the World Development Indicators. The data collected were from 1979-2019 and it was focusing on the following variables: Net flow of FDI in USD$; access to electricity as a percentage of the population; access to primary health care, ICT fixed telephone subscriptions per 100 people; transport services, water and sanitation and natural resources. These variables were selected for this study since they were significant in explaining FDI in the SADC region (Chapfuwa, 2020). The countries make a population of 350 million people and a GDP of $706.3 billion. Data analysis was conducted using techniques such as estimation techniques, regression analysis and the Baseline Model in order to answer the research questions and achieve the research objectives. Estimation techniques, regression analysis, and the Baseline Model were used for data analysis since they provided valuable information about data distributions, relationships between variables, and predictive capabilities. They provided the researcher with deeper insights to make more informed decisions, and enhance the reliability of the conclusions The findings of the study included the following: The study revealed that Electricity and Human Capital were significant in explaining FDI in the SADC region. Birth and population were found to be statistically significant in explaining FDI in the SADC region at 5% level of significance. It also emerged that GDP was a statistically insignificant determinant of FDI in the SADC region at the 5% level of significance.
Some of the recommendations that emerged from the study included that SADC region was supposed to prioritise investment and improvement of infrastructure such as the road network and electricity. The SADC region can also focus on increasing investments in renewable energy sources such solar given the abundance of sun in the region.
