Abstract
Investment is considered as a crucial element of economic growth and post 2015 development agendas. The main aim of this study is to assess the determinants of private investment. For this purpose, concentrated and careful literature review was done on 11 papers conducted in nine African countries. Eight variables were considered for analysis. The result shows that output/national income, public investment and exchange rate are the critical variables affecting the performance of private investment. The others variables: interest rate, credit, inflation rate, international trade, and money supply are also slightly important in explaining the performance of private investment. The study finally recommends that countries should seriously work in creating enabling environment for private investment.
Highlights
Economic literatures prove that investment is, both empirically and theoretically, the key determinant to economic growth
Economic growth refers to an increase in a country’s production or income per capita. It is usually measured by gross national product (GNP) or gross national income (GNI), used interchangeably, an economy’s total output of goods and services
Private investment is a major driver of economic growth
Summary
Economic literatures prove that investment is, both empirically and theoretically, the key determinant to economic growth. Economic growth refers to an increase in a country’s production or income per capita. Investment is the source of manufactured goods that will be used to produce other goods. It is the major foundation of enhancement in the level of literacy, improvement in technology and increase in the capital stock (Hashmi et al 2012). The implication of low investment is that the productive capacity of the economy fails to increase. This in turn leads to lower rates of growth and job creation, and fewer opportunities for the poor to improve their livelihoods (White, 2005). Commitment to investment is the central issue in the process of structural diversification
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