Globalization and Economic Growth in Sub-Saharan Africa

This study analyzes Sub-Saharan Africa through the framework of globalization. The study‘s objective is to determine whether globalization is a significant factor when associated with economic growth in the region. Using panel data from 1995-2005 for 41 countries and the KOF globalization index, an Ordinary Least Squares (OLS) model was employed to examine the relationship between globalization and other traditional factors of economic growth such as trade, foreign direct investment, loans, aid, natural resources, corruption, and rule of law. The study shows that globalization has a positive, though statistically insignificant impact on the economic growth of Sub-Saharan Africa. However, globalization is positive and statistically significant for countries with scarce natural resources. I interpret these results as proving that the leading causes of slow economic growth in Sub-Saharan African countries is due to heavy dependence on natural resources, low investment in human capital, and the negligence of other industries—all of which suggest that these countries are unable to effectively manage critical processes of globalization. Indeed, in order to reap the net benefits of globalization, I argue, African countries need to work towards economic stability by developing better macroeconomic policies for their future.