Factors affecting economic growth in sub-Saharan Africa : A panel data analysis of the factors that affect economic growth and the development of sub-Saharan African countries

Economic growth rate differs largely between different countries. There are many opinions on which factors really affect the rate of growth in different economies and this causes debates. The factors that affect economic growth include political systems, social settings, economic freedom, human capital and institutional organization. These factors affect not only productivity, but also efficiency. This thesis’ purpose is to investigate and explain the factors that affect economic growth in sub-Saharan Africa. Through use of a fixed effects regression model, a panel data investigation will be conducted, and an analysis will be presented in this thesis. By using secondary data for sub-Saharan African countries from reliable sources, the factors that affect economic growth on an annual basis from year 2006 to 2017 are examined. Growth in gross domestic product per individual (GDP per capita growth) is the dependent variable and represents economic growth. The independent variables which are believed to affect this growth are also given, and these include: population growth, foreign direct investment, level of corruption, democracy, life expectancy at birth, expected years of schooling and economic freedom. The findings estimate that some of the chosen variables, for example population growth and life expectancy at birth significantly affect economic growth and development in these countries. The rest of the independent variables have an impact on economic growth but are not statistically significant according to this study