The impact of foreign direct investments of Turkey and Germany on Sub-Saharan African countries

Many researchers have tried to estimate the impact of foreign direct investment on growth around the developed countries, but few have focused on Sub-Saharan Africa. Accordingly, in this thesis will estimate the impact of Turkish and German Foreign Direct Investment(FDI) on economic growth of Sub-Saharan Africa countries, using secondary data from Central bank of Turkey and Germany, and African countries. Using ARDL model approach, the study uses economic growth as dependent variables and Total FDI, Turkish FDI, German FDI, Trade and finance as independent variables. Using E-views 10.0 software program, the researcher test for co-integration of long run relationship by applying the Bounds ARDL Co-integration test. The results from the test shows Turkish FDI has no significance on the economic growth of sub-Sahara Africa. The results are contrary to theoretical finding which shows wide spread of Turkish companies and investments in different sub-Saharan countries and also the nature of the Turkish investment in infrastructure boosts the growth. Unlike many other countries investors which concentrate more on natural resources, the Turkish investors concentrate more infrastructure sector which is effective for economic growth and bring new technology or knowledge to the host countries. On the other hand, the Total FDI, German FDI, Trade and finance has positive significance on the sub-Saharan Africa, the results were the same with previous findings. The result was because of concentration of German companies in few African countries as well as the types of items of trade which has high values than the Turkey's FDI outflows. Keywords: Economic Growth, Foreign Direct Investment, Turkey, Germany, Sub-Sahara Africa, GDP, Trade.