The effect of foreign direct investments on human development in the region of sub-saharan Africa

Abstract: This paper aims to explore the relationship between Foreign Direct Investments and the standard of living in terms of the Human Development Index in the region of Sub-Saharan Africa. The theory of economic growth is based on Solow. For the region of Sub-Saharan Africa, Foreign Direct Investments ought to be of great importance to finance the investments needed to achieve economic growth according to Solow. The reason for this is that the region of Sub-Saharan Africa lacks the ability to finance these investments with its own savings. The focus of the report is the Foreign Direct Investments; although the variable shows no significant correlation to the Human Development Index, there is a significant positive correlation between Foreign Direct Investments and health expenditure as a percentage of total government expenditure, one of the driving forces behind an improved Human Development Index.