Chinese FDI and the African Health System

Abstract: Numerous African governments are actively implementing diverse strategies to attract increased foreign direct investments (FDI) to bolster their economies. However, there remains an ongoing debate regarding the impact of FDI on economic development, particularly concerning healthcare. Furthermore, there is a notable lack of understanding regarding the influence of Chinese FDI on the African health system, despite China's substantial investments in the continent over the past two decades. Consequently, this study aims to explore the relationship between Chinese FDI and the health systems of 41 African countries spanning the years 2004 to 2018. Data from five health indicators are aggregated to create a composite variable. Additionally, this new indicator, along with FDI, will be regressed against variables representing health outcomes, such as life expectancy and infant mortality rate. This approach seeks to assess whether the effects of FDI on the structural health system translate into tangible improvements in health outcomes, thereby contributing to an overall enhancement in living standards. The findings demonstrate a positive and significant correlation between Chinese FDI and the African health system, as well as between the health system and health outcomes. However, the direct effects of FDI on health outcomes yield ambiguous results.