Foreign direct investment, domestic investment and economic growth in ecowas countries

This study examined the impact of foreign direct investment and domestic investment on economic growth in Economic Community of West African States countries for the period 2000 to 2013. Using the General Method of Moments technique, the empirical analysis revealed that FDI has a positive and statistically effect on economic growth in ECOWAS countries. In addition, domestic investment, human capital development and inflation, although insignificant, have positive impact on economic growth in the region while trade openness and USA dollar appreciation discourage economic growth in the region. Moreover, the monetary union of West African Economic & Monetary Union countries contributes negatively to their economic growth. Arising from the findings of this study, the paper concludes that foreign direct investment has a positive sign and statistically significant impact on economic growth and therefore recommends an intensified effort to design policies that attract foreign direct investment in the study countries.