La contribution des investissements directs étrangers à la réduction de la pauvreté en Afrique subsaharienne

We examine the contribution of FDI on poverty reduction in Sub-Saharan Africa from 1990 to 2005. The effects of FDI on poverty are analyzed through two mechanisms: institutional and economic. First, analyzing the institutional mechanism by a principal component analysis, we find out that manufacturing FDI are positively correlated with economic development, investment climate and reducing poverty. Second, we analyze the effects of FDI on poverty through economic mechanism within two parts. On one hand, multinational firms can crowd-in or crowd-out local firms. Using adequate econometric method “GMM Arenallo and Bond (1991)”, we detect that FDI in Sub-Saharan African countries crowd-out local investments. On the other hand, FDI affect absolute poverty through their effects on both growth and inequality. Using a simultaneous equations model, we’ve found that extractive FDI promote growth but increase inequality. This leads to an increase of absolute poverty. Thus, poverty reduction in Sub-Saharan Africa should be based, primarily, on distribution processes.