What does this research mean for the field?

Foreign direct investment negatively impacts sustainable development in Sub-Saharan Africa when energy infrastructure is weak, but yields significant positive outcomes as energy infrastructure improves. Novelty: ClaimNovelty.INCREMENTAL. Consensus alignment: ConsensusAlignment.NEUTRAL.

What question did this study set out to answer?

To investigate whether the quality of energy infrastructure moderates the effect of foreign direct investment on sustainable development outcomes across Sub-Saharan Africa.

August 23, 2026EnergiesOpen Access

Foreign Direct Investment and Energy Infrastructure in Sub-Saharan Africa: Does Energy Infrastructure Condition the Sustainable Development Effects of FDI?

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Authors

PMPatricia Lindelwa MakoniUniversity of South Africa JAJude Igyo AliUniversity of South Africa

Discussion

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Implication

Panel analysis reveals energy infrastructure conditions the sustainable development impact of foreign investment in 35 African nations, indicating that reliable power enhances absorptive capacity.

Key Points

To investigate whether the quality of energy infrastructure moderates the effect of foreign direct investment on sustainable development outcomes across Sub-Saharan Africa.
Analyzed macroeconomic panel data from 35 Sub-Saharan African countries over the period 2000–2024.
Measured sustainable development via adjusted net savings and energy infrastructure using the Energy Infrastructure Composite Index.
Applied second-generation panel estimators including fixed effects with Driscoll–Kraay standard errors, Common Correlated Effects Mean Group, Augmented Mean Group, System GMM, and panel quantile regression.
Foreign direct investment exerts adverse effects on sustainable development in environments with weak energy infrastructure, but shifts to significant positive effects as infrastructure improves.
Positive interaction terms between foreign direct investment and energy infrastructure confirm that upgraded energy systems expand national absorptive capacity.
Institutional quality represents the most robust positive determinant of sustainable development across all econometric estimators and quantiles.

Cite This Study

Makoni et al. (2026) studied this question.

synapsesocial.com/papers/6a8aae007677a34114446a51 https://doi.org/10.3390/en19163924

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August 23, 2026EnergiesOpen Access

Foreign Direct Investment and Energy Infrastructure in Sub-Saharan Africa: Does Energy Infrastructure Condition the Sustainable Development Effects of FDI?

View Full Paper

Ask AI

Bookmark

Authors

PMPatricia Lindelwa MakoniUniversity of South Africa JAJude Igyo AliUniversity of South Africa

Discussion

Member takes

Implication

Panel analysis reveals energy infrastructure conditions the sustainable development impact of foreign investment in 35 African nations, indicating that reliable power enhances absorptive capacity.

Key Points

To investigate whether the quality of energy infrastructure moderates the effect of foreign direct investment on sustainable development outcomes across Sub-Saharan Africa.
Analyzed macroeconomic panel data from 35 Sub-Saharan African countries over the period 2000–2024.
Measured sustainable development via adjusted net savings and energy infrastructure using the Energy Infrastructure Composite Index.
Applied second-generation panel estimators including fixed effects with Driscoll–Kraay standard errors, Common Correlated Effects Mean Group, Augmented Mean Group, System GMM, and panel quantile regression.
Foreign direct investment exerts adverse effects on sustainable development in environments with weak energy infrastructure, but shifts to significant positive effects as infrastructure improves.
Positive interaction terms between foreign direct investment and energy infrastructure confirm that upgraded energy systems expand national absorptive capacity.
Institutional quality represents the most robust positive determinant of sustainable development across all econometric estimators and quantiles.

Cite This Study

Makoni et al. (2026) studied this question.

synapsesocial.com/papers/6a8aae007677a34114446a51 https://doi.org/10.3390/en19163924

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