Foreign Direct Investment in the Sub-Saharan Africa: Unveiling the Pains and Gains of Domestic Firms

Abstract

This study aimed at unveiling the pains and gains of domestic firms towards Foreign Direct Investment in the Sub-Saharan Africa. The objectives of the study were to ascertain the effect of inward Foreign Direct Investment on Domestic Firms, and to establish gulfs between gains and pains of Domestic Firms in Sub-Saharan Africa relative to technology spillover, competition, environmental degradation and Global Value Chains. The study used a systematic review. This enables the drawing of experience, ideas, and similar situations of others. Search strategy was incorporated to enable the searching of literature in database of reputable journals. It was discovered that the volume of Foreign Direct Investment is high in Sub-Saharan Africa, and that it has greater positive effect on Domestic Firms. It was established that Foreign Direct Investment presents gains as well as pains to Domestic Firms in Sub-Saharan Africa relative to technology spillover, competition, environmental degradation and Global Value Chains. The study concluded that Foreign Direct Investment is not totally inimical to Domestic Firms in SSA. Thus, the study suggested that government of various countries in Sub-Saharan Africa should revisit and review their policies, where necessary, to protect their infant firms or Domestic Firms, and should intervene in the drain experienced by Domestic Firms, and cushion the negative impact of technology spillover by providing capital support and enhancing strong institutional quality.